Intro

I know you are, but what am I?” That obnoxious childhood refrain often reminds me of the fiduciary debate going among advisers, regulators, and plan sponsors. Of course, the plan sponsor is always the fiduciary, but is the adviser a fiduciary as well? A co-fiduciary? Not a fiduciary at all? In some ways, does it even matter unless the Department of Labor (DoL) gets involved?  At that point, it doesn’t matter what names were thrown around on the playground, because the DoL says the rule is based on your actions (much like playground monitors, I might add).

In October, the DoL released proposed regulations that would do away with the current five-part test for who is a fiduciary and replace it with four broad categories of providers. These new categories appear to bring in most advisers and consultants providing guidance to retirement plan sponsors (it also might bring in IRA advice, but that’s a whole other ball of wax).

In theory, it sounds somewhat revolutionary, which might be why everyone seems to think the industry has a little while before we have to deal with it. Surprisingly, as I reviewed the comment letters submitted to the Employee Benefits Security Administration (EBSA), there weren’t many names I recognized. I expected to see more industry groups, broker/dealers—even some advisers. However, it seems the most common concern so far about the new definition of fiduciary is that it will treat those valuing stock for an ESOP as a fiduciary. Maybe the thought that the rule change is so far off is why there aren’t more adviser groups speaking out. However, as our cover story suggests, retirement plan advisers need to understand what the DoL is trying to do and how the proposed changes might relate to their business model. The story “Up in the Air” (page 30) comprises five short articles, each examining a different “flavor” of the fiduciary discussion.

Like the apparently unceasing snow in the Northeast this winter, we also have a continuing focus on regulatory items this issue. “A Heavy Load” (page 36) discusses what changes Washington has in store for the retirement plan industry, and undoubtedly what advisers have to look forward to incorporating in their practices. Rules that are both relatively minor, such as target-date fund disclosures, and those that are more significant: 408(b)2 disclosure rules and participant-level disclosures. If you got caught up with your practice and serving clients at the end of the year, we’ll catch you up on what you missed.

In her previous column, Marcia Wagner discussed how the DoL has proposed changing the definition of fiduciary. In this issue, she discusses the potential implications of the new rule and the changes put in place by the Dodd-Frank Act (page 49).

For an easy-to-use reference (for your plan sponsor clients or for yourself), don’t miss our 2011 compliance calendar (page 40).

For those wanting a break from Washington (as, yes, I would like a break from some of the nasty weather that is on its way again—or so I hear), you can check out “The Right Lure” (page 44), which discusses the request for proposal process and what advisers are sometimes using the process for (some say it is actually the minority of the time that a provider is being changed). FINRA and SEC advertising rules might not be clear about how you can use Twitter yet, but it is only natural to be curious (what is “tweeting” anyway?). Our Learner’s Permit section in this issue (page 12) will tell you how to get started and set up a Twitter account, plus how to use some of those seemingly bizarre symbols.

Next month, we will break from this regulatory-heavy issue and profile the PLANSPONSOR Retirement Plan Adviser and Adviser Team of the Year finalists and winners! Stay tuned.

—Alison Cooke Mintzer, Executive Editor