ERISA is the underpinning of the law and rules that govern qualified plans. This section covers updates and revisions to the law and the growing number of lawsuits under ERISA, outlines best practices and provides insights into how advisors can understand ERISA’s nuances, use them to help clients and win more business.


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 Staff12/28/2012 • 0 Comments

In what could be a seminal case for the DC industry, a pretrial conference was scheduled in Minnesota for Jan. 7, 2013 in the suit by Ameriprise DC participants claiming fiduciary breach and prohibited transactions. The trial could begin as early as Dec. 9, 2013, or it could delayed until July 31, 2014 if the defendant’s recommendations are followed. In the lawsuit, which was filed in September 2011, Ameriprise employees claimed that instead of proprietary funds which paid fees to Ameriprise and its subsidiaries, less expensive share classes saving 25 bps could have been offered. READ MORE

By NAPA Net Staff12/26/2012 • 0 Comments

Have you ever been involved with a plan sponsored by a company that's either merging with or acquiring another? Though most advisors “should not try this at home,” it’s good to understand the issues and get in front of them if possible — since this may, in fact, determine whether the advisor is out of a job or not. Combining the Internal Revenue Code and ERISA can be like handling nitroglycerine, so experienced counsel is essential. READ MORE

By NAPA Net Staff12/14/2012 • 0 Comments

Are advisors who are not parties in interest or ERISA fiduciaries liable if they knowingly participate in a prohibited transaction and receive compensation from plan assets? The 3rd U.S. Circuit Court of Appeals thinks so. In the case at issue, employers had established a trust within an ERISA-covered welfare plan and would make tax-deductible contributions which would create tax-free, annuity-like payments for the employer’s owners after their retirement. The advisor had directed his plan clients into the scheme and received compensation from the administrative company that had set up the trust, which was compensated by the insurance policies that funded the plan. READ MORE

By Robert J. Rafter12/10/2012 • 0 Comments

The Department of Labor will re-propose its controversial rule to amend the definition of fiduciary under ERISA within several months, Phyllis Borzi told Advisor One on Dec. 7. Borzi indicated that DOL “is not finished” with the rule, and went on to say that agency officials are addressing many of the legitimate issues that were raised in the comment process. READ MORE

By NAPA Net Staff12/4/2012 • 0 Comments

In its recently released 2012 financial report, the SEC indicated that, among other things, it will look to harmonize fiduciary standards for investment advisors and broker dealers that provide the same services. The SEC also plans to hire more examiners — funds permitting — and to continue with other rulemaking under Dodd Frank. With the DOL likely to pursue its own agenda, will the rules covering advisors working with DC plans and retail investors be compatible? READ MORE

By NAPA Net Staff11/27/2012 • 0 Comments

If you thought lawsuits against 401(k) plans were dead, think again. Renowned plaintiff’s attorney Jerome Schlichter won a battle against Ameriprise when a federal judge in St. Paul, MN refused to dismiss Schlichter’s case, which claims that the 14,000 participants in Ameriprise’s $1 billion plan paid higher fees than they should have because proprietary funds were offered on the platform. READ MORE

By NAPA Net Staff11/6/2012 • 0 Comments

ERISA imposes strict liability on plan sponsors to conduct proper due diligence, yet many are ill prepared to discharge that responsibility. Tim Minard, an SVP at Principal Financial Group, outlines five very practical and basic steps on how to form and run an Investment Committee and detail the necessary sections of an Investment Policy Statement. READ MORE

By NAPA Net Staff11/2/2012 • 0 Comments

Political changes resulting from the November 6 elections are unlikely to have a major effect on how critical retirement plan policy decisions are made. Most significantly, decisions about fundamental changes to the tax code are likely to be made in the context of budget issues, not retirement policy issues. READ MORE

By NAPA Net Staff10/26/2012 • 0 Comments

Think that 401(k) lawsuits are over? Think again. Emboldened by recent successes and armed with more information through the fee disclosure regulations and benchmarking data, plaintiff attorneys’ next target could be advisors, warns Fred Reish of Drinker Biddle. Section 408(b)(2) only details the fees charged, he notes — providing no sense of whether those fees are reasonable without applicable benchmarking data. Reish warns that advisors whose fees are above the norm could become targets of an ever-active plaintiffs’ bar. READ MORE

By Fred Barstein10/25/2012 • 1 Comments

Like many things in the DC world, “fiduciary” has become a commodity that providers are offering — in some cases, for as little as three basis points. Clearly there is massive confusion and misuse of a term that was intended to distinguish well-intentioned advisors and help improve outcomes. I’m not advocating that the industry drop the term, but I do think it’s time to move to a more holistic, less technical term that does not come with baggage for advisors that do the right thing for clients. READ MORE

By NAPA Net Staff10/23/2012 • 0 Comments

In a simple but complete checklist, T. Rowe Price details all the duties of a plan fiduciary, along with guidelines on how to best complete them. Plan advisors can use the checklist to engage prospects who may not be aware of their roles and responsibilities, may not be complying or don’t have an expert to guide them through the serious repercussions of non-compliance. READ MORE

By Robert J. Rafter10/16/2012 • 1 Comments

The U.S. Department of Labor is on a mission to provide better information to both plan sponsors and participants about plan expenses. At the heart of the DOL's new rules is the need for plan sponsors and other fiduciaries to discover and clearly understand whether plan fees are reasonable in light of the services provided. The watchword? Caveat emptor — let the buyer beware; or in this case, as the buyer of plan services, fiduciaries and plan sponsors beware! READ MORE

By NAPA Net Staff10/16/2012 • 2 Comments

It appears that benchmarking plan advisors will become as common as benchmarking funds and record keepers. The problem with benchmarking record keepers — and now advisors vs. funds — is that it’s really hard to assess value or outcomes compared with fees. David Witz of FRA Plan Tools outlines the case and the issues surrounding plan advisor benchmarking in a comprehensive article published in the Fall 2012 edition of ASPPA’s Plan Consultant magazine. While it’s getting easier to determine advisory fees and potential services, the question of value will remain until we can benchmark outcomes like we do with funds. READ MORE

By NAPA Net Staff10/15/2012 • 1 Comments

Many employers get complacent about benchmarking fees, understanding the law and documenting their activities. The Tussey v. ABB case illustrates how one sponsor that was asleep at the wheel paid for those lapses. Advisors can use this to wake up clients and prospects who think it will never happen to them – why take that risk? READ MORE

By Jason Roberts10/3/2012 • 0 Comments

Finally, after months — perhaps years in some instances — of preparation, diligent providers of services to retirement plans have now completed their disclosures in satisfaction of ERISA Section 408(b)(2) and they lie in the hands (or at least the inboxes) of the responsible plan fiduciaries. The final deadline, July 1, has passed. While that milestone may merit a collective sigh of relief, the work is just beginning for the service providers that delivered the disclosures and the plan sponsors that received them. It is critical that both develop sound protocols to maintain compliance and to be prepared for what lies ahead. READ MORE

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