Compliance March 24, 2008

SPARK Asks IRS for 403(b) Prototype Plan Program

The SPARK Institute has submitted a formal request to the IRS for a “Pre-Approved 403(b) Prototype Plan Program,″ according to SPARK Institute general counsel Larry Goldbrum.
Reported by

In a SPARK Institute press release, Goldbrum said the Institute outlined in its letter nine areas for consideration in developing a prototype document to meet its stated goals. According to Goldbrum, some of the key considerations include pre-approval of documents covering governmental 403(b) plans and church 403(b)(9) plans.

“The objective of our comment letter to the IRS is to help in the design of a pre-approved 403(b) plan program which is accessible to employers on a cost-effective basis, is easy to implement and maintain, and is understandable to non-retirement plans specialists,” he said, in the announcement.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

The SPARK Institute also requested that the IRS postpone the compliance deadline for the written 403(b) plan document requirement so that employers could adopt an IRS-approved prototype document at the outset, rather than developing their own document that may later have to be revised in order to comply.

Last week SPARK filed a 13-page comment letter with the IRS asking for an extension of the effective date for compliance and guidance on the treatment of contracts and information sharing agreements (See SPARK Institute Wants Extension for New 403(b) Regs).

Products March 24, 2008

Morningstar Announces Active ETFs in Managed Account

Morningstar Investment Services on Monday introduced a managed account offering made up of five actively managed portfolios using exchange-traded funds (ETFs).
Reported by

According to a Morningstar news release, Managed ETF Portfolios are actively managed using a “core and explore’ investment process, which combines “core’ positions that provide exposure to broad asset classes in an efficient and low-cost manner with “explore’ positions that seek to add value by taking advantage of opportunities in the markets.

Selection of explore positions are based on a proprietary ETF-evaluation system developed by Morningstar Investment Services that combines macroeconomic and fundamental factors, the announcement said. Among other factors, the ETF-evaluation system assesses the composition, structure, and liquidity of individual ETFs, and marries it to research on fundamental factors such as valuation and growth drivers of the underlying securities.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

The product is offered exclusively through financial advisers, Morningstar said.

“ETFs offer investors exposure to specific segments of the capital markets in a diversified, low cost, and tax efficient manner similar to index funds,’ said William Harding, director of research for Morningstar Investment Services, in the announcement. “Our new Managed ETF Portfolios combine these positive attributes of ETFs with our objective research, analysis, and portfolio management expertise in actively managing these portfolios to ensure they are well positioned given their risk and return objectives.’

Morningstar said Ameritas Investment Corp. and Centaurus Financial, two independent broker/dealer firms, recently selected the new product for use by their investment adviser representatives. Ameritas has 600 adviser representatives and Centaurus has 500.

«