Products March 25, 2009

Mercer Adds Adviser Channel to DC Administration Sales

Mercer announced Wednesday it is expanding sales of its defined contribution administration services to add distribution through the adviser channel.
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A Mercer news release said the change will mean it is offering its DC services to clients with 500 or more employees. To support the new adviser effort, Mercer said it now fields a dedicated sales team, an adviser relations manager, and relationship management support staff.

Historically, Mercer sold to this market segment through an exclusive agreement with Putnam Investments, the release said. That agreement has since been terminated for new business, but the two firms will continue to service the existing book of clients, officials said.

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“Our extensive experience in the defined contribution space has shown that a solution that brings together investment independence and fee transparency with relationship management, participant communication services, and regulatory support is a powerful combination,” explained Jeff Miller, president of Mercer’s outsourcing business, in the news release.

Compliance March 25, 2009

Providers Need More Time, Guidance for Form 5500 Rules

A substantial majority of retirement plan service providers are unsure about how to comply with the new Form 5500 Schedule C reporting requirements, according to a recent survey by The SPARK Institute.
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Larry Goldbrum, general counsel of The SPARK Institute, said in a press release that nearly three quarters of the service providers responding to the survey said they need additional time and guidance in order to accurately comply with the new rules.

“In some instances, according to our survey, respondents were equally split on key reporting issues,” Goldbrum said, in the release. “Consequently, different interpretations and reporting practices will result in inconsistent and unreliable data and significant resources will be spent on making systems changes that will be of little or no value to plan sponsors, the DOL or anyone else that uses the data.’

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According to Goldbrum, nearly 80% of the survey respondents said they expect to make systems changes to accommodate the new regulations, and a significant number are unsure whether they will be ready in time to meet the current deadline.

Goldbrum also noted that the new regulations will have an impact on plan sponsors. “A significant majority (58%) of respondents reported that they are changing their 5500 service offering as a result of the new requirements, and many (32%) will charge an additional fee for the service,’ Goldbrum said. “More than two-thirds (68%) of the service providers surveyed also said they expect that plan sponsors will have to collect some required data that was not required of them in the past.’

Last July, federal regulators have released additional guidance about new rules for reporting service provider fees and compensation on Schedule C of Form 5500 for plan years beginning on or after January 1, 2009 (see “EBSA Issues Schedule C Fee Disclosure Guidance’).

In addition, many 403(b) sponsors will have to complete full Form 5500 reporting for the first time under new regulations effective January 1 (see “403(b) Plans to File Full Form 5500’).

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