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6th Circ. Says Denial Letter Must Note Lawsuit Time Limits - Law360 (subscription)
Posted on Aug 7, 2014 (13 days ago)
6th Circ. Says Denial Letter Must Note Lawsuit Time LimitsLaw360 (subscription)In a 2-1 ruling, the appellate panel found that MetLife wasn't in substantial compliance with the Employee Retirement Income Security act when it neglected to include that there was a contractual three-year time limit on filing a lawsuit over a claim ...
ESOPs and 401(k) Plans: Coordination Tips for Administrators
Posted on Aug 1, 2014 (19 days ago)
"[F]or ESOP providers, the [408(b)(2) regulations] require that there be a specific written agreement outlining the scope of work, direct and indirect compensation, termination compensation, and manner of receipt. Investment entities, brokers, and their fiduciaries that hold plan assets (such as the investments from an ESOP non-stock account) must provide information on fees and expenses related to the investments.... When you provide more than one qualified plan to your employees, plan administration should be done in harmony. The delivery of compliance services should be seamless." (Tom Roback, Blue Ridge ESOP Associates, via LinkedIn)
A New Summer Pastime: Get a Benchmark of Your 401(k)
Posted on Jun 30, 2014 (51 days ago)
"75% of the 401k plans audited by the DOL last year resulted in plan sponsors being fined, penalized, or forced to make reimbursements for plan compliance errors.... Similar to getting an annual physical to determine the current state of your health, your 401k plan will be served well by fully articulating the services being provided and determining whether there may be an opportunity to significantly reduce investment-related expenses." (Tom Zgainer, America's Best 401k)
How Tax Reform for Retirement Plans Can Affect Risk and Compliance (PDF)
Posted on May 27, 2014 (85 days ago)
"Current legislative proposals relating to retirement benefits can be grouped into three categories:  those whose goals are purely fiscal,  those seeking to expand the current system by adding programs or features that will increase access to it or enhance its fairness and  those that would make the system more efficient by updating rules effectuating obsolete or conflicting policies.... Any such proposals must balance the goals of increasing revenue and limiting expenditures with maintaining a retirement benefits system that provides effective incentives to save for retirement without undue administrative complexity." (The Wagner Law Group)
[Guidance Overview] Death, Taxes and ... ERISA Disclosure Regulations?
Posted on May 22, 2014 (90 days ago)
"[U]nless revised or clarified, the proposed amendment would presumably prohibit a covered service provider from including the guide as an exhibit or attachment to another document (e.g., as an exhibit or attachment to a subscription agreement or an investment management agreement).... [It] is not clear whether the guide requirement will only apply on a prospective basis (i.e., to contracts or arrangements entered into, renewed or extended after the effective date of the finalized amendment) or to existing arrangements as well. Accordingly, it is possible that a covered service provider would need to deliver a guide even in situations where it had already sent out 408(b)(2) disclosures in compliance with the final regulations." (Proskauer's ERISA Practice Center)
Keynote Address At Compliance Week 2014, SEC Commissioner Kara M. Stein ... - Exchange News Direct
Posted on May 19, 2014 (93 days ago)
Keynote Address At Compliance Week 2014, SEC Commissioner Kara M. Stein ...Exchange News DirectThey help our citizens buy homes, save for retirement, and pay for their children's educations. When compliance is lacking, confidence in .... Stock Market Participation (January 2014). [ii] In the Matter of Transamerica Financial Advisors, Inc., SEC ...
Well, according to an article in the most recent issue of Financial Advisor Magazine, it isn't. The article indicates that sustainable investing (when one considers environmental, social and corporate governance criteria to generate long-term financial returns and positive societal impact) isn't something which clients prioritize. It's more something the advisor will ask about and sometimes learn that it's on a client's spectrum of importance but not a front burner issue. I've got to say, in my office we have many clients who have indicated at the very first meeting how important sustainable and socially responsible investing issues are to them. More below: Perhaps one reason why many advisors don't have clients giving high priority to this issue is that sustainable investing is a louder theme with younger generations. As an advisor with many clients under 40, I can attest to the fact that the younger demographic cares more about these issues than people ages 60+. Because much of the wealth in our country is held by people in that older demographic, we don't see just how many people truly care about the culture of the companies they are investing in. I would think over the next 20 years that focus will continue to shift towards sustainable investing. In the 90's, there was this prevalent attitude that avoiding tobacco, oil, casino stocks meant accepting a lower total return on your portfolio as those were some of the most profitable industries in America. The exact opposite may be true today. Many people believe sustainable investing is not just a feel-good notion, but that it leads directly to good financial management since companies that practice these strategies may be better run. According to Lynne Ford of Calvert Investment Distributors: "If management teams are controlling their usage of resources and demonstrating efficiency over time, then it's an indicator of a well-run global company, outperformance and uncorrelated alpha due ...
Chart Summarizes Status of Proprietary Fund Litigation
Posted on May 9, 2014 (103 days ago)
19 pages. "The use of 'proprietary' (also referred to as 'affiliated') products and services raises a series of issues under ERISA's prohibited transaction rules and fiduciary standards. Compliance with these rules and standards is under increased scrutiny by the [DOL] and the plaintiffs' class action bar, which has filed more than a dozen lawsuits against the fiduciaries of in-house plans. [This] chart identifies the lawsuits that have been filed to date, describes the claims that have been asserted in the lawsuits, and summarizes the substantive court rulings and the procedural status of the cases." (Groom Law Group)
[Opinion] Jobs, Income Inequality and Taft-Hartley Benefit Plans (PDF)
Posted on Apr 25, 2014 (117 days ago)
"Necessary policy and regulatory changes include permitting the plans to participate directly in the health-care exchanges, allowing low-wage plan participants access to ACA subsidies and giving the retirement plans greater flexibility to adjust benefits and contribution rates.... Federal policy is chiefly focused on compliance issues for the plans, with little effort to encourage their growth in spite of their proven ability to train and maintain workforces. A better approach would be for the federal government to provide the financial resources necessary to address the plans' challenges, both through tax benefits to health-care plans and regulatory relief to pension plans." (Kraw Law Group, via Bloomberg Pension & Benefits Daily)
Financial Advisors and "Dual Registration" - Understanding the Jargon
Posted on Apr 9, 2014 (133 days ago)
When people ask me what I do, it's easy enough to respond "I'm a financial advisor." But the technical explanation as to how my organization operates is more complicated. I figured why not write an article about it because it reflects an industry trend and may be interesting to my clients and other readers. My firm (Premier Wealth Advisors, LLC) is an RIA (Registered Investment Advisor) which provides fee-based advisory services. However, we are also licensed as registered representatives of First Allied Securities, Inc., an independent broker/dealer firm. Through First Allied we are able to offer an additional array of commission-based products including life insurance and annuities. While fee-only advisors are the rage these days, I thought it was important to be dually registered so that I can continue to offer a full slate of investment and advisory products and services to my clients. Why send my clients to another advisor to buy insurance when we can do it here? As a comprehensive wealth management firm, our clients should be able to get everything they need here from investment and insurance services to tax and estate planning. A recent article from Financial Planning magazine's website discusses this topic and points out that from a compliance standpoint, the dually registered advisor has more potential issues to deal with. A fee-only advisor may not have to register with FINRA and therefore may have more flexibility with their advertising, marketing, and record-keeping requirements. In fact, the SEC noted earlier this year that dually registered advisors can expect increased scrutiny from its examiners in 2014. One of the central tenets of that scrutiny is likely the fact that dually registered advisors can steer clients into either a fee-based (advisory) account or a traditional brokerage account with commissions. Regulators have different standards of care for each of those account types and it can get sticky if advisors are operating under both a ...