Technical Competence

This station houses posts and commentary about the challenges facing state and municipal DB pension plans — funding, municipal bankruptcies, litigation, etc.

Technical Competence

Technical Competence

By Fred Barstein7/26/2013 • 0 Comments

A federal judge ruled that unions could not go to state court to fight Detroit’s Chapter 9 bankruptcy filing, but they could still argue in federal court that the bankruptcy filing was improper and violated Michigan’s constitution. READ MORE

By Andy Stonehouse7/26/2013 • 0 Comments

Feeling a bit like you've got 404a-5 participant fee disclosure overload? You're not alone. But as the rules are indeed on the books, you're going to have to learn how to deal with them. READ MORE

By Fred Barstein7/26/2013 • 1 Comments

As NAPA’s 1st Annual DC Fly-in Forum approaches on Sept. 17-18, many top DC Congressional leaders and policymakers have agreed to speak, with more expected. READ MORE

By Andrew Remo7/25/2013 • 0 Comments

On Tuesday, July 24, the Aspen Institute’s Initiative on Financial Security organized a briefing for congressional staff to discuss how reforming the tax code could affect the retirement security of Americans. READ MORE

By Fred Reish7/24/2013 • 1 Comments

The Office of Management and Budget has posted that it received a proposed regulation from the Department of Labor. Unfortunately, it is not the much-anticipated proposed regulation on fiduciary advice. READ MORE

By John Carl7/24/2013 • 4 Comments

Responding to a question from an advisor in California, the ERISA consultants at the Columbia Management Retirement Learning Center Resource Desk addressed a common inquiry involving savings incentive match plans for employees (SIMPLE) IRA plans. READ MORE

By Craig Hoffman7/23/2013 • 0 Comments

The Department of Labor has provided relief to plan administrators by announcing a transitional enforcement policy regarding the due date for the “second round” of participant disclosures under the new 404(a)(5) regulations. READ MORE

By Fred Barstein7/22/2013 • 0 Comments

Fee disclosure may be ready to hit IRAs. After the recent GAO report that some IRA providers made misleading claims about fees to undercover GAO reps who were posing as people with rollovers, a few Senators called for further investigation. Now, FINRA has weighed in with a recent Notice about misleading advertisement by members about IRA fees. READ MORE

By Fred Barstein7/19/2013 • 0 Comments

As part of the deal struck by Senate Democrats with Senate Republicans to fast-track a handful of the president’s nominations, Thomas Perez was confirmed July 18 as the new Secretary of Labor. READ MORE

By Fred Barstein7/18/2013 • 0 Comments

Like most complicated questions, the answer is yes and no. It is possible for a plan fiduciary to outsource the administrative reporting and disclosure requirements to a third party under ERISA section 3(16) but there are legitimate concerns and caveats. In a thoughtful article by ERISA legal eagle Marcia Wagner in the recent Plan Consultant magazine published by ASPPA, the issues are clearly and thoughtfully explored. READ MORE

By Fred Barstein7/15/2013 • 0 Comments

We’re not sure how tall Morningstar’s Adam Zoll is, so we can only assume he is called “the short answer man” because of his brevity — which is always appreciated. This week Zoll tackles the following questions and provides concise answers: READ MORE

By John Ortman7/12/2013 • 0 Comments

Especially given today’s market volatility and legal environment, plan sponsors are generally looking for ways to manage the risks associated with serving as an ERISA fiduciary — and specifically, for ways to help mitigate the risks that arise from selecting and monitoring a plan’s investment lineup. Even where agreements set limits and boundaries, a plan committee’s actions may dictate fiduciary responsibility. READ MORE

By Jennifer McKibben7/12/2013 • 1 Comments

While the popularity of the 401(k) plan has soared in recent years, many investors may not have given much thought to why it works so well. Some factors are within an investor’s control, while others are not. If investors want to achieve retirement success, this Fiduciary News column notes, they need to understand the four primary cogs that contribute to the 401(k)’s success. (Caution: Column includes automotive metaphors.) READ MORE

By Don Trone7/10/2013 • 0 Comments

For more than 26 years I have been teaching retirement advisors that all things warm and wonderful can be linked back to a fiduciary standard. I no longer believe that; I think we may be at the start of what I’ll call the “Post-Fiduciary Movement.” READ MORE

By Fred Barstein7/9/2013 • 0 Comments

The question of what happens when interest rates rise has a serious impact on stable value funds but, according to comments by leading investment consultants and recent research, plan sponsors are not abandoning ship — though they are concerned. There are a lot of questions about SVFs, but so far, plans are holding firm. READ MORE

By Brian Graff, Esq.7/8/2013 • 4 Comments

The uniform fiduciary standard has become a holy grail of sorts for the financial advisor industry. Legends such as John Bogle tout how it is the only way to ensure that the interests of average investors will be protected. Proponents of the single standard stress that the current dichotomy between the fiduciary standard applicable to registered investment advisors and the suitability standard utilized by registered representatives is confusing to investors who fail to appreciate that certain advisors are not "acting in their interest." Only with a uniform fiduciary standard, they say, will investors be safe from the current, misleading bifurcated regime. READ MORE

6/27/2013 • 1 Comments

The U.S. Supreme Court ruled yesterday that the Defense of Marriage Act (DOMA) is unconstitutional. The Court’s decision in United States v. Windsor means that same-gender marriages must be recognized by the federal government in the states that permit them. For ERISA plans, however, the Court’s decision leaves open more questions than it answers. READ MORE

By Fred Barstein6/26/2013 • 0 Comments

After obtaining permission from the SEC, FINRA will start publishing a monthly report detailing broker complaints and sanctions. The SEC currently has a similar program. Currently, investors can look up information about individual brokers on BrokerCheck gleaned from U4 filings. READ MORE

By Fred Barstein6/25/2013 • 0 Comments

Last December, a judge allowed a lawsuit by Verizon retirees to halt the sale of $7.5 billion or 25% of their DB plan to Prudential to proceed. The suit claimed that the sale wiped out the pensioners’ insurance protection under the PBGC. Now a U.S. district court has dismissed the suit because the court did not believe that the purchase of an annuity was a fiduciary function or that the $1 billion premium payment was unreasonable. The plaintiffs have 30 days to file an amended complaint. READ MORE

By Fred Barstein6/17/2013 • 0 Comments

Most plans want revenue sharing to pay all applicable plan expenses, which seems to be fine according to court decisions and the DOL, but they could get in trouble if funds are chosen with an eye toward the revenue sharing they produce. As fiduciaries, plan sponsors must design the plan for the sole benefit of participants, so selecting funds that generate more revenue for third parties would be a violation. And what if the revenue exceeds the cost? How should those funds be allocated? READ MORE

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