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Referrals Under the Final Fiduciary Rule |
The rule provides that recommending a fiduciary investment adviser to an IRA owner in exchange for a referral fee, such as a solicitor’s fee, is a fiduciary act. And, under the rule, virtually every adviser will be a fiduciary.
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Don’t Forget About Sweep Programs |
A sweep program, fund or similar device is a common means used by retirement plan advisers and their affiliates to hold account assets on a short-term basis pending an investment or other transaction. These programs may give rise to prohibited transaction issues under the Internal Revenue Code or the Employee Retirement Income Security Act.
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Government Plans Will Receive Face-Lift |
Unlike 457(b) plans and tax-qualified plans such as 401(k)s, there is no limit on the amount that may be deferred under a 457(f) plan. However, 457(f) plans suffer an important disadvantage when compared with those other types of plans; specifically, the amounts deferred are taxable to the employee when they become vested, rather than when they are paid to him.
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The 'Threat' of the PPA |
Thanks to the Pension Protection Act of 2006, we are able to assume that most plan sponsors can add automated plan features if they are interested, and we often question why a plan wouldn’t be interested in such a design feature.
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Momentum |
Besides getting people participating in retirement plans, the PPA also provided employers with a chance to improve employees’ asset allocation. It opened the floodgates for target-date funds and set the stage for a high level of comfort for plan sponsors to use TDFs as the qualified default investment alternative.
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