The 2016 volume of PLANADVISER marked our 10th year in print.
Some features of the magazine have changed over the years, but looking back we are particularly proud of our consistent stable of Employee Retirement Income Security Act (ERISA) attorney columnists. We hope our audience has benefited as much as we have from reading their thoughtful and timely opinion articles about a variety of pressing industry issues.
Collected below are some of the best 2016 columns from esteemed ERISA attorneys including Fred Reish and Joan Neri (authors of ERISA Vista), Marcia Wagner (author of Fiduciary Fitness) and David Kaleda (author of Compliance Consult). They will be back in 2017 for another year of opinion and insight.
ERISA VISTA: Sweeping Changes in Advice
Retirement plan advice has changed to respond to plan sponsors’ desire for assistance in satisfying their fiduciary duties; the increased pressure on reducing costs; and the needs of aging Baby Boomers. Here’s our list of some of the most significant changes. [Read More]
ERISA VISTA: Rollovers Under the Fiduciary Rule
“I’m an adviser who provides investment advice to ERISA [Employee Retirement Income Security Act] plan committees. I also provide wealth management and financial planning services to individuals. Under the final Department of Labor fiduciary rule, will I be able to advise plan participants or wealth management clients about their distribution options under a plan or an individual retirement account?” [Read More]
ERISA VISTA: Referrals Under the Final Fiduciary Rule
If the person making the recommendation—the referrer—receives a fee for the recommendation, it will be a fiduciary act when the rule becomes applicable, on April 10, 2017. That means the referral fee may be a prohibited transaction. [Read More]
ERISA VISTA: Mastering Fiduciary Compensation
The compensation rules are complex, but it helps to understand that they center around three concepts—that they be: level, reasonable and neutral. The compensation rules also impact your firm. However, this column focuses on the rules that impact you. [Read More]
NEXT: Fiduciary Fitness
Fiduciary Fitness: Government Plans Will Receive Face-Lift
Governmental employers and tax-exempt institutions operate under significant restrictions when offering nonqualified deferred compensation (NQDC) plans to management and other key employees. After signaling to these employers that further restrictions were in the offing, the Internal Revenue Service (IRS) recently issued a package of proposed regulations revamping the rules governing so-called “ineligible plans” or “Section 457(f) plans”; the rules are, in fact, more liberal than anticipated and will make it easier to design and operate these plans. [Read More]
Fiduciary Fitness: Burden of Proof
A recent case that defense attorneys likely believe is an example of the maxim “bad facts make bad law” is Estate of Barton v. ADT Security Services Pension Plan, for which a request for rehearing was recently denied. The facts of the case are straightforward; the implications of the decision are not. [Read More]
Fiduciary Fitness: Raising the Plaintiffs’ Bar
As Willie Sutton, the prolific bank robber, said, “Go where the money is … and go there often.” The recent crop of excess fee cases include a subset of lawsuits against banks and financial institutions that sponsor 401(k) plans making their own products available on the investment menu of an in-house plan and utilizing subsidiaries to serve as the plan’s trustee and recordkeeper. [Read More]
Fiduciary Fitness: The New Fiduciary Rule
The wide net of fiduciary advice would be unworkable and disrupt the delivery of plan services by providers unwilling to assume fiduciary obligations were it not strategically narrowed by a half dozen exclusions from the fiduciary definition. If a provider satisfies the conditions under one of these exclusions, it will not be deemed a fiduciary even when providing investment-related recommendations to retirement clients. [Read More]
NEXT: Compliance Consult
Compliance Consult: Fee-Only Fiduciaries
The DOL points to FINRA guidance as to articulating the meaning of “recommendation,” though it stops short of adopting that definition itself. Further, the final rule allows an adviser to provide “investment education” about distributions and rollovers without being deemed a fiduciary, for providing “investment advice,” but this educational exception may be narrowly interpreted by the DOL or a court. [Read More]
Compliance Consult: 'Fiduciary' vs. 'Suitability'
On the surface, the ERISA and FINRA standards are different. ERISA requires that an adviser act as a “prudent expert” when making a recommendation, while FINRA requires that the adviser “have a reasonable basis to believe” that a recommendation is “suitable.” However, there is commonality between the two regulators’ guidance in terms of what factors might be considered in determining whether a recommendation is prudent or suitable. [Read More]
Compliance Consult: The SEC Is Watching
In many situations, the courts and the SEC take the position that an adviser can fulfill his duties under the Advisers Act by adequately informing a client of a conflict and receiving the client’s informed consent. Of course, many advisers take additional steps to mitigate conflicts. For instance, an adviser may be “walled off” from other professionals in the organization, so that he is less likely to be put in a position where he will fail to act in his client’s best interests. [Read More]
Compliance Consult: Advisers’ Sales Partners
If sellers fail to qualify for the independent fiduciary exception or some other exception, they likely will be considered fiduciaries in connection with a sales transaction involving an ERISA account or IRA. Therefore, sellers must comply with an exemption under ERISA or the IRC, as applicable. [Read More]