Category: 401(k)


Best Interest and Best Practices #9

Posted on November 13, 2018, by Fred Reish in 401(k), 403(b), best interest, DOL Activity, prudent, Reg BI, Registered Investment Advisers, RIA, SEC. Comments Off on Best Interest and Best Practices #9

What Does “Best Interest” Mean? (Part 1)

This is the 9th of a new series of articles titled “The Bests.” The series focuses on Best Interest and Best Practices. Those topics give me flexibility to discuss a range of subjects that affect both service providers, including advisors, and plan sponsors, including 401(k) and 403(b) committees.

“Best Interest” has become part of the American lexicon . . . as an aspirational goal or a demanding standard—depending on the point of view. But, what does best interest mean? It may mean different things to different people . . . and perhaps even to different regulators. However, I believe that most people would agree on the definition in this article.

As I read the guidance issued by the Department of Labor (DOL), the Securities and Exchange Commission (SEC), and New York State, there are actually … Read More »

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Best Interest and Best Practices #8

Posted on November 7, 2018, by Fred Reish in 401(k), 403(b), DOL Activity, fiduciary. Comments Off on Best Interest and Best Practices #8

Fiduciary Training: The Need for Basics

This is the 8TH of a new series of articles titled “The Bests.” The series focuses on Best Interest and Best Practices. Those topics give me flexibility to discuss a range of subjects that affect both service providers, including advisors, and plan sponsors, including 401(k) and 403(b) committees.

In three earlier posts—Bests #4, #5, and #6—about the Sacerdote v. New York University decision, I discussed the good and the bad of the NYU plan committee and made several suggestions about best practices for improving committee performance. This article focuses on one of those suggestions—fiduciary education for committee members.

As a starting point, there is not a legal requirement that committee members receive fiduciary training. Instead, it’s a best practice and good risk management.

But, what should the fiduciary education cover? Based on my analysis of court … Read More »

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Best Interest and Best Practices #7

Posted on October 30, 2018, by Fred Reish in 401(k), 403(b), DOL Activity, Reg BI, Registered Investment Advisers, RIA, SEC. Comments Off on Best Interest and Best Practices #7

SEC Best Interests . . . When? And What About the DOL

This is the 7th of a new series of articles titled “The Bests.” The series focuses on Best Interest and Best Practices. Those topics give me flexibility to discuss a range of subjects that affect both service providers, including advisors, and plan sponsors, including 401(k) and 403(b) committees.

The Regulatory Agendas for the SEC and DOL were recently issued. Both have plans for guidance by September of 2019, but the anticipated timing of the guidance has, by and large, been misinterpreted. To understand what I mean, read on.

The SEC’s Agenda said that Final Action on the Regulation Best Interest proposal for broker-dealers and the Interpretation of Standard of Conduct for investment advisers would be “09/00/2019.”

Similarly, the Department of Labor Agenda said that there would be a final rule on … Read More »

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Best Interest and Best Practices #5

Posted on October 11, 2018, by Fred Reish in 401(k), 403(b), best interest, Plan Sponsors, prudent, Service Providers. Comments Off on Best Interest and Best Practices #5

What is the Baseline for A Committee to Act in the Best Interest of Its Participants? (Part 2)

This is the fifth of a series of articles titled “The Bests.” The series focuses on Best Interest and Best Practices. Those topics give me flexibility to discuss a range of subjects that affect both service providers, including advisers, and plan sponsors, including 401(k) and 403(b) committees.

This is my second article about the case of Sacerdote v. New York University. As I discussed in my last post, the Court’s opinion pointed out the deficiencies in the understandings and conduct of some committee members. However, the Court ultimately ruled in favor of the plan fiduciaries and against the plaintiffs. Why was that?

Despite the deficiencies (or “bad practices”) of some committee members, others on the committee were engaged and knowledgeable. Obviously, that was an important factor. … Read More »

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Best Interest and Best Practices #4

Posted on October 3, 2018, by Fred Reish in 401(k), 403(b), fiduciary. Comments Off on Best Interest and Best Practices #4

What is the Baseline for A Committee to Act in the Best Interest of Its Participants? (Part 1)

This is the fourth of a new series of articles titled “The Bests.” The series focuses on Best Interest and Best Practices. Those topics give me flexibility to discuss a range of subjects that affect both service providers, including advisors, and plan sponsors, including 401(k) and 403(b) committees.

The recent decision in the case of Sacerdote v. New York University is a classic story of the good and bad of plan committees. Let’s start with the bad.

Five current and former committee members testified at the trial. But not all of the testimony was helpful.

In the opinion, the Court said that the testimony of one of the co-chairs “was concerning.” The court went on to say:

She made it clear that she viewed her … Read More »

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Best Interest and Best Practices #3

Posted on September 26, 2018, by Fred Reish in 401(k), 403(b), best interest, Plan Sponsors, Service Providers. Comments Off on Best Interest and Best Practices #3

Best Practices for Plan Sponsors: Projection of Retirement Income

This is the third of a new series of articles titled “The Bests.” This series focuses on Best Interest and Best Practices. Those topics give me flexibility to discuss a range of subjects that affect both service providers, including advisors, and plan sponsors, including 401(k) committees.

My first two posts of “The Bests” were about Best Interest for advisors. In this article, I am shifting to Best Practices for plan sponsors. Keep in mind that a Best Practice is above and beyond the legal requirements. Best Practices are not mandated; they are elected.

While the most obvious Best Practices are automatic enrollment and automatic deferral increases, I want to start with the projection of retirement income for participants. That’s partially because it is in a current legislative proposal—in the Retirement Enhancement and Savings … Read More »

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