Fund distributors are contractually entitled to the 12b-1 payment, not the plan, and for very specific distribution purposes. The mutual fund’s Board has already had to make a fiduciary determination that the fee is reasonable, in the best interest of the mutual fund shareholders, and that its payment complies with Rule 12b-1. Separately, the ERISA plan’s fiduciary can only permit the purchase a mutual fund which has a 12b-1 program if the amount of the 12b-1 fee is reasonable from the plan’s point of view, regardless of whether the mutual fund feels its reasonable.
Continue Reading The Dueling Fiduciary Shadows of 12b-1 Fees

Though disclosure may make the sales comp reasonable under 408(b)(2) (that is, if you view sales as a service), it still does relieve the 406(b)(2) adversity problem. To make any sense of this, it looks like you still need to comply with PTE 84-24 in addition to the 408(b) 2 disclosures.
Continue Reading The Continuing Efficacy of Commission Disclosures Under PTE 84-24 After 408(b)(2)

The disclosures related to 408()(2) are really just a precursor to the next step: the imposition of the prohibited transaction taxes and penalties related to compensation which fails to meet those standards.  It looks like the regs have the effect of shifting the application of the rules related to the "amount involved" in the transaction

Now that the initial 408(b)(2) disclosures are out, the challenge becomes understanding them. Beyond just understanding whether or not the fees disclosed are reasonable (a challenge in itself), the disclosures do something arguably more important: they take us behind the looking glass, opening a window to a world with which most are not familiar, but

With all of the intense activity in the marketplace related to providing the initial 408b-2 and 404a-5 disclosures in a timely manner, there is what I could only describe as a "sea change" occurring, relatively quietly, behind the scenes in financial service firms related to the ongoing responsibilities under the DOL’s new disclosure rules.  For

The DOL continues with its sensitivity to the challenges created for 403(b) plan sponsors in the transition to an employer accountable world. In today’s release of the final 408(b)(2) regs, the DOL provided tremendously needed relief for 403(b)plans. The language from the preamble speaks for itself:

The Department was persuaded by commenters on the interim final

Freedom and liberty are not merely themes sounded by politicians in political campaigns, or in rousing marches by military bands (though I am personally  particularly fond of them!), nor are they ideas which you will typically see being discussed in a piece about retirement issues. But they are themes woven into the fabric of our