Category: 403(b)


Best Interest Standard of Care for Advisors #4

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 Standard of Care for Advisors #4

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

I am writing two series of articles that together are called “The Bests.” One is about Best Practices for plan sponsors, while the other is about the Best Interest Standard of Care for advisors. Each series is numbered separately to make it easier to identify the subject that is most relevant to you.

This is the fourth of the series about the Best Interest Standard of Care.

“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 … Read More »

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Best Practices for Plan Sponsors #5

Posted on November 7, 2018, by Fred Reish in 401(k), 403(b), best practices, DOL Activity, fiduciary. Comments Off on Best Practices for Plan Sponsors #5

Fiduciary Training: The Need for Basics

I am writing two series of articles that together are called “The Bests.” One is about Best Practices for plan sponsors, while the other is about the Best Interest Standard of Care for advisors. Each series is numbered separately to make it easier to identify the subject that is most relevant to you.

This is the fifth of the series about Best Practices for Plan Sponsors.

In three earlier posts—Best Practices for Plan Sponsors #2, #3, and #4—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 … Read More »

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Best Interest Standard of Care for Advisors #3

Posted on October 30, 2018, by Fred Reish in 401(k), 403(b), best interest, DOL Activity, Reg BI, Registered Investment Advisers, RIA, SEC. Comments Off on Best Interest Standard of Care for Advisors #3

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

I am writing two series of articles that together are called “The Bests.” One is about Best Practices for plan sponsors, while the other is about the Best Interest Standard of Care for advisors. Each series is numbered separately to make it easier to identify the subject that is most relevant to you.

This is the third of the series about the Best Interest Standard of Care.

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 … Read More »

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Best Practices for Plan Sponsors #3

Posted on October 11, 2018, by Fred Reish in 401(k), 403(b), best practices, Plan Sponsors, prudent, Service Providers. Comments Off on Best Practices for Plan Sponsors #3

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

I am writing two series of articles that together are called “The Bests.” One is about Best Practices for plan sponsors, while the other is about the Best Interest Standard of Care for advisors. Each series is numbered separately to make it easier to identify the subject that is most relevant to you.

This is the third of the series about Best Practices for Plan Sponsors.

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 … Read More »

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Best Practices for Plan Sponsors #2

Posted on October 3, 2018, by Fred Reish in 401(k), 403(b), best practices, fiduciary. Comments Off on Best Practices for Plan Sponsors #2

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

I am writing two series of articles that together are called “The Bests.” One is about Best Practices for plan sponsors, while the other is about the Best Interest Standard of Care for advisors. Each series is numbered separately to make it easier to identify the subject that is most relevant to you.

This is the second of the series about Best Practices for Plan Sponsors.

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 … Read More »

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Best Practices for Plan Sponsors #1

Posted on September 26, 2018, by Fred Reish in 401(k), 403(b), best practices, Plan Sponsors, Service Providers. Comments Off on Best Practices for Plan Sponsors #1

Best Practices for Plan Sponsors: Projection of Retirement Income

I am writing two series of articles that together are called “The Bests.” One is about Best Practices for plan sponsors, while the other is about the Best Interest Standard of Care for advisors. Each series is numbered separately to make it easier to identify the subject that is most relevant to you.

This is the first of the series about Best Practices for Plan Sponsors.

“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 Act (RESA), and also because, in my opinion, it doesn’t receive … Read More »

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Fiduciary Investment Advice for Participants

Posted on March 19, 2012, by Fred Reish in 403(b), DOL Activity, fiduciary, prohibited transaction, prudent. Comments Off on Fiduciary Investment Advice for Participants

The DOL recently issued its final regulation on conflicted investment advice to participants. Unfortunately, the scope of the regulation is not well understood. For example, if an adviser does not have any conflicts (that is, if the adviser cannot vary its revenue or that of any affiliates based on the recommended investments), then the adviser does not need to comply with the new regulation. For example, the adviser would not need to comply with the certification or audit requirements. However, if the adviser has financial conflicts of interest and can affect its own revenues (or those of an affiliate), then the adviser must comply with those requirements in order to give fiduciary investment advice to participants.

Together with other attorneys from my law firm, I have written a bulletin on the subject. If you are interested in having further information, please … Read More »

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Finally the Final … 408(b)(2) Regulation

Posted on February 3, 2012, by Fred Reish in 403(b), 408(b)(2), DOL Activity, fiduciary, Service Providers. Comments Off on Finally the Final … 408(b)(2) Regulation

The DOL issued the final 408(b)(2) regulation on February 2, 2012.

Key points are:

The extension of the effective date to July 1, 2012;
The fact that service providers are not required to provide a summary of the disclosures, though the DOL provided a sample “guide” that is not mandatory;
The addition of a requirement to describe the arrangement between a covered service provider and the payer of indirect compensation;
Clarification that electronic transmission of the disclosures is permitted;
Relief from the disclosure requirements for “frozen” 403(b) contracts;
A new requirement that plan sponsors terminate the relationship with a service provider who fails or refuses to provide information on request;
Limited relief for disclosures for brokerage accounts and similar arrangements.

Bruce Ashton and I have drafted a more detailed Alert for our law firm, Drinker Biddle & Reath LLP.  That Alert is located at:

http://www.drinkerbiddle.com/resources/publications/2012/finally-the-final-408b2-regulation

 

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