Regulatory Compliance

Regulatory Compliance covers compliance with ethical codes of conduct as well as those promulgated by FINRA and the SEC. Much of the interaction a plan advisor has with plan sponsors and participants is governed by ERISA and agencies like the Department of Labor. But as registered reps or investment advisory reps, their conduct and activity are also regulated by FINRA and the SEC. In turn, broker dealers and registered investment advisors must also adhere to the rules relating to retirement plans, as well as their representatives’ interaction with the investing public. 

Regulatory Compliance

Regulatory Compliance

By NAPA Net Staff2/28/2013 • 0 Comments

What’s on the minds of regulators at the IRS and SEC this year? At the IRS, 401(k) plans for sure, along with 403(b) plans — with a focus on failure to have internal controls or to follow the ones in place, according to the law firm Bryan Cave. The SEC is concerned about advisors that are part of a broker dealer they don’t own or control but also do business through an RIA they do own and control. The Commission will be reviewing what types of conflicts that business model might pose for clients. READ MORE

By NAPA Net Staff2/12/2013 • 0 Comments

Participants from three Fidelity DC plans have filed a lawsuit in the U.S. District Court in Boston alleging that Fidelity improperly used float income from interest bearing accounts earned from the time a participant requested disbursement to when it was actually disbursed. The plaintiffs alleged that the interest is part of plan assets and that Fidelity paid itself trust and record keeping fees beyond the authorized agreements. READ MORE

By NAPA Net Staff2/1/2013 • 0 Comments

What do Congress and federal regulators have in store for the retirement industry in 2013? According to Aon Hewitt, although health care will get the most attention on the benefits front, retirement issues will get their fair share of attention from federal regulators this year. READ MORE

By NAPA Net Staff1/31/2013 • 2 Comments

Is consulting on a 401(k) plan considered a violation of FINRA’s rules prohibiting outside business activities? A broker recently settled with FINRA on this issue without admitting or denying the findings in a Letter of Acceptance, Waiver and Consent (AWC). READ MORE

By NAPA Net Staff1/22/2013 • 2 Comments

Will the 401(k) industry have another federal agency looking over its shoulder? Though the SEC and DOL have been the primary regulators, there are signs that the Consumer Financial Protection Bureau (CFPB) could be entering the fray, according to a report by Bloomberg. Though the consumer bureau does not have direct jurisdiction over investments, it could step in if the other agencies don’t. READ MORE

By NAPA Net Staff1/14/2013 • 2 Comments

The prevailing wisdom about the DOL’s fee disclosure rules is that they were ineffective and failed to move the needle on participant behavior. Numerous studies and polls have confirmed this perception. But John Schadl, principal and head of Vanguard Strategic Retirement Consulting, identifies one benefit of the disclosure rules: uniformity. READ MORE

By NAPA Net Staff1/11/2013 • 0 Comments

Sungard Relius, a reliable source of technical information for plan professionals, tackles the question of how to correct improper exclusions in a safe harbor plan. As part of answering that question, Relius also answers three key questions, including examples. Though most plan advisors will rely on their record keeper partners or TPA to help with technical corrections, part of being a pension professional is understanding the technical requirements of the industry. READ MORE

By Robert J. Rafter1/9/2013 • 2 Comments

In a post on the DOL’s blog, EBSA’s Phyllis Borzi boasts that the agency “protected or recovered” more than $1.2 billion in FY 2012 “for workers who participate in private-sector employee benefit plans and their beneficiaries.” Most of this total was reported for participants in 401(k) or similar retirement account plans, as well as employee stock ownership plans. READ MORE

By NAPA Net Staff1/9/2013 • 0 Comments

The IRS recently announced the new tax withholding tables resulting from the American Taxpayer Relief Act, a.k.a the fiscal cliff legislation. Employers should begin withholding Social Security tax at the rate of 6.2% percent following the expiration of the temporary two-percentage-point payroll tax cut in effect for 2011 and 2012. The payroll tax rates were not affected by ATRA. READ MORE

By NAPA Net Staff12/31/2012 • 0 Comments

The vast majority of retirement plans do not have to be audited, leading some to argue that the 100-eligible-employee threshold, which has been in place for a while, should be increased. Regardless, retirement plan sponsors with 100+ eligible employees — not 100 participating employees, which is the threshold for health and welfare plans — should be especially careful, with increased DOL enforcement activity likely. READ MORE

By NAPA Net Staff12/28/2012 • 0 Comments

The Department of Labor publishes a semi-annual Unified Agenda of rules and regulations that are in the works or under review. The latest list for DOL’s Employee Benefits Security Administration (EBSA) includes five important items that plan advisors need to know about covering the definition of fiduciary, TDFs, lifetime benefits and 408(b)(2). READ MORE

By NAPA Net Staff12/26/2012 • 2 Comments

Lest you think that the IRS is just out to catch mistakes and run up revenue from fines and penalties, here are a few simple and straightforward ways to stay out of trouble, courtesy of the agency: • Common Mistakes During Plan Audits • Whether IRS Loan Limits Apply to All Plans • Late Deposit of Salary Deferrals — Fixing Common Plan Mistakes READ MORE

By NAPA Net Staff12/20/2012 • 0 Comments

With 2012 almost gone, this is a good time to look forward to next year. Vanguard provides a simple 2013 compliance calendar for plan sponsors, including requirements for plan- and participant-level fee disclosure. READ MORE

By NAPA Net Staff12/17/2012 • 0 Comments

The DOL is moving forward with its plan to issue a new proposed regulation on retirement plan benefit statements. Reportedly, the proposed regulation will include the DOL’s initiative on lifetime income by providing for disclosure of an equivalent annuity benefit. This would be in the form of an estimate of what the participant’s current account balance would provide as an annuity benefit beginning at normal retirement age. READ MORE

By NAPA Net Staff12/17/2012 • 0 Comments

New York Times business columnist Gretchen Morgenson lauded the attempt by the EBSA’s Phyllis Borzi to change the rules related to the retirement plans of bankrupt companies. Reviewing the plight of Penn Specialty, whose $4 million plan remained in limbo while the company went through bankruptcy proceedings racking up fees and limiting participants’ access to their money, Morgenson sees hope in the proposed regulations. READ MORE

By NAPA Net Staff12/11/2012 • 1 Comments

The U.S Department of Labor's Employee Benefits Security Administration announced Dec. 11 a proposed rule and related class exemption that will make it easier for Chapter 7 bankruptcy trustees to distribute assets from bankrupt companies' retirement plans. The proposal would allow Chapter 7 bankruptcy trustees to use EBSA's existing Abandoned Plan Program to terminate, wind up and distribute benefits from such plans. READ MORE

By NAPA Net Staff12/5/2012 • 0 Comments

Though the nation’s political pundits are talking more and more about going over the fiscal cliff as if it's likely, not just possible, it’s important to maintain perspective. With a deadline of Dec. 31, the fact is that plenty of time remains for negotiators to make a deal. In fact, for both sides, striking a deal early could make them look like they compromised too soon, perhaps leaving an issue on the table that could have been won had they held out just a little longer. READ MORE

By NAPA Net Staff11/19/2012 • 0 Comments

RIAs should know what it means to be a “designated investment manager” (DIM). This is important because under DOL guidance, if an RIA is a DIM, then the RIA’s investment management strategies — including asset allocations — are not considered designated investment alternatives subject to detailed participant disclosure (e.g., expense ratios, performance history, portfolio turnover rates). In contrast, the participant disclosure rules that apply to a DIM require only that the plan — initially and then annually — provide to participants the identity of the DIM and a description of the DIM service and fee. READ MORE

By NAPA Net Staff11/19/2012 • 1 Comments

Some people argue against any kind of hardship withdrawal or loan from a retirement plan, but few would argue about the special circumstances surrounding the consequences of Hurricane Sandy. Accordingly, the IRS announced on Nov. 16 that participants in a qualified plan may make hardship withdrawals or loans even if the plan does not currently allow for them, on three conditions: they are made between Oct. 26, 2012, and Feb. 1, 2013; the plan or participant is located in an area affected by Sandy; and the plan documents are amended on a timely basis. READ MORE

By NAPA Net Staff11/14/2012 • 0 Comments

One of the more controversial regulations proposed by the DOL under President Obama was their plan to broaden the definition of fiduciary to include more financial advisors. According to a BNA report, a proposed rule has been submitted to the Office of Management and Budget for clearance and should be issued in early 2013. At a recent International Foundation of Employee Benefit Plans conference, Borzi indicated that it was time to include financial advisors in the definition of a fiduciary. READ MORE

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