Be prepared to work hard when you need to take a 403(b) plan through the new EPCRS process under Rev Proc 2013-12-as many of you will need to do soon- especially if you have to use the VCP process, or are defending an audit under CAP.It is going to be complicated.This is not necessarily the fault of the drafters of the Rev Proc. They were stuck with a very difficult task: to try to make something which is fundamentally different from a 401(a) plan still fit uniformly into the 401(a) correction scheme.
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Re-Thinking Fiduciary Allocations under ERISA Sections 402 and 405: Back to the Future
The growing complication of the ERISA regulatory scheme is causing many retirement plan sponsors to seek some measure of regulatory relief. This, in turn, is the basis for the popularity of MEPs and PEOs, as a number of service providers seek to fulfill this market demand for a new kind of professional fiduciary which address these employer concerns.
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Keeping Your 403(b) Plan In Control
If you have seen the November 14th edition of the IRS’ Employee Plans New, you already know that “internal controls” is the latest catchphrase. And, as the IRS ramps up its audit activity with 403(b) plans, chances are that more IRS auditors will be asking 403(b) sponsors about internal controls for their plans.
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Keeping 12b-1 Basics in View When Reviewing Plan Revenue Sharing
I have noticed a curious perception with regard to all of this activity related to 12b-1 arrangements, which gives me some pause. There seems to be a growing sense of entitlement, that somehow plans are entitled to revenue sharing, that there is some sort of innate (and perhaps legal) entitlement plans have to the 12b-1 and service fee payments generated under these programs. It seems that often this is where the conversations begin, and is even seems to be creeping into some of the DOL’s own approach to these things.
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The EPCRS and Audit Test of the 403(b) Regulations
Now with EPCRS, we are told, being on the verge of release, and with 403(b) audits beginning to enter a new, what I would call “normalized” stage, the 2007 regs will truly be put to the test.Where this will have its impact is when you have to drill down and attempt to apply the regs in detail to any particular fact circumstance….
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MEP Reflections Following the GAO Report
The GAO issued its long awaited study on Multiple Employer Plans. It is nicely written, and for those who with an interest in such matters, it’s a good read.
It pretty well summarizes the current state of affairs related to MEPs. The report, along with our own recent review of MEPs, really demonstrates a
Suggestions for Regulatory Next Steps to Accommodate DC Annuities
Both of these agencies (Treasury and DOL) continue to attempt to support this process, using their existing regulatory authority. Though there are a number of things which probably need legislative action in order to really make guaranteed lifetime income readily available, there are still a few things regulators may want to consider doing to help it all along
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The Reasonableness of Fees in Retirement Products
In short, a retirement plan product is really a package of financial and administrative services. This knowledge is especially important when one is tasked with understanding the reasonableness of fees related to retirement products and services. Purchasing investments through a defined contribution plan is so different than an individual making purchases for their own personal account, and it is horribly misleading to suggest otherwise.
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“Overstating” the 404a-5 Non-Electing Participant Disclosure: Its a Question of When, not If…
A number of friends, and other commentators, had suggested to me that I was perhaps “overstating” the position I had discussed on my last blog regarding the delivery of 404a-5 notices to non-electing participants in an elective deferral plan. It was a very kind way of saying that I was wrong. After looking at the
The “Tussey Twist” to the DOL’s Disclosure Rules
The DOL has long treated the revenues sharing programs (such as 12b-1 and sub-transfer agent fees) related to investment funds in the same manner as the SEC: as an integral part of the funds’ operating expenses. This choice, however, has the side effect of the actual amount of the revenue sharing not ever having to