Deals & People December 18, 2007

Ex-Fidelity Exec Named To Lead Morgan Stanley Global Wealth Management

Ellyn A. McColgan, who left Fidelity Investments abruptly this summer, has been named president and chief operating officer of Morgan Stanley’s global wealth-management group.
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McColgan will report to James Gorman, who was recently promoted to co-president.

According to published reports, McColgan will begin in April and will oversee the firm’s more than 8,300 advisers.

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While at Fidelity Investments, it had been speculated that McColgan might take over Edward “Ned’ Johnson III’s reins at the firm. However, after being named president of distribution in April, she resigned in August (see McColgan Departs Fidelity After Four Months In New Post), after being at the company for nearly two decades.

Compliance December 18, 2007

DoL Proposes Civil Penalties for Disclosure Violations

The U.S. Department of Labor (DoL) has proposed a regulation for assessing civil penalties against plan administrators who fail to disclose certain documents to participants, beneficiaries, and others as required by the Pension Protection Act (PPA).
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According to an announcement from the DoL, the proposed regulation sets forth the administrative procedures for assessing and contesting penalties but does not address substantive provisions of the new disclosure requirements. The proposal will be published in the Dec. 19, 2007, edition of the Federal Register.

The PPA established new disclosure provisions relating to funding-based limits on benefit accruals and certain forms of benefit distributions; plan actuarial and financial reports; withdrawal liability of contributing employers; and participants’ rights and obligations under automatic contribution arrangements (See IRS Publishes Sample Notice for Auto Enrollment Arrangements). The PPA gives the DoL authority to assess civil monetary penalties of up to $1,000 per day against plan administrators for violations of the new disclosure requirements, the DoL said.

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Comments may be submitted to the DoL at e-ORI@dol.gov or through www.regulations.gov. Paper-based comments should be sent to the Office of Regulations and Interpretations, Employee Benefits Security Administration, Room N-5655, U.S. Department of Labor, 200 Constitution Ave. N.W., Washington, D.C. 20210, Attention: 502(c)(4) Civil Penalty.

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