Compliance May 7, 2012

DOL Issues Additional Guidance for Participant Fee Disclosures

The Department of Labor’s Employee Benefits Security Administration (EBSA) issued frequently asked questions about the requirements of new participant fee disclosure rules.  
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Field Assistance Bulletin 2012-02 answers questions on what types of plans are covered under the regulation, including tax-sheltered annuity programs under Section 403(b). It also addresses methods of disclosing plan-related information and how to deal with revenue sharing.   

“This guidance will help both plan administrators and covered service providers comply with their obligations under the department’s new fee-transparency rules, so that workers who make their own investment decisions in retirement plans will have the information they need to make informed investment choices,” said Assistant Secretary of Labor for EBSA Phyllis C. Borzi. “We also are working on a second set of frequently asked questions and answers focused more narrowly on the new rules for disclosure by covered service providers.”

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To view Field Assistance Bulletin No. 2012-02, visit http://www.dol.gov/ebsa/regs/fab2012-2.html.    

 

Products May 7, 2012

Tool Helps Advisers Focus on Retirement Income Planning

 

Pacific Life introduced an online tool to help advisers engage clients in a conversation about building sustainable lifetime retirement income.

 

 

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 The tool was developed using product-allocation research, which blends three categories of income products—traditional investments, variable annuities and guaranteed income solutions—in optimal proportions to create lifetime retirement income.

The adviser enters information about the client’s age, current retirement savings and desired retirement income. The tool then generates a numerical measure called a Retirement Sustainability Quotient (RSQ). The higher this number, the more likely that the client’s current portfolio can generate the desired level of retirement income stream over his or her lifetime.

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The tool offers up to three possible product-allocation strategies with higher RSQs. These higher RSQ strategies illustrate how the client might increase his or her likelihood of creating a more sustainable lifetime retirement income.

“It can be used as a stand alone educational tool or as a complement to more comprehensive retirement planning software that the adviser may already use,” said Christine Tucker, Pacific Life’s vice president of marketing, Retirement Solutions Division.

The tool’s analytical engine was built by the Quantitative Wealth Management Analytics Group (QWeMA) Group, which develops software algorithms in wealth management, investments and insurance.

For more support and training, Pacific Life is unveiling a suite of sales, education and promotional resources for its advisers— including an interactive website and tools, as well as printed materials—that focus on product allocation.

More about product allocation is available at www.PacificLife.com.

 

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