Posted by Thomas Simonson on January 15, 2013 | 
For the first time ever, retirement plan fiduciaries were required to receive a government-mandated summary of the fees charged to them by their 401(k) plan providers. These “covered service providers” include most plan record keepers, administrators and investment advisors. This fee summary, known as a 408(b)(2) disclosure, was required to be in plan fiduciaries’ hands by July 1, 2012. Assuming you received it, what are you supposed to do with it?
Posted by Jessica Skinner on April 11, 2012 |
Permissible Plan Expenses and Those That Fall on the Wrong Side of the Fence: On Which Side of the Settlor Fence Do Your Plan Expenses Fall?
It is a simple concept: retirement plan expenses are either payable from the plan’s assets or they are not. In practice, it can be much more difficult.
The Employee Retirement Income Security Act (ERISA) requires the plan fiduciary to evaluate all fees paid by the plan to ensure those expenses are related to a necessary fiduciary function. The kicker is, many expenses incurred by a plan are not related to a fiduciary function but are instead settlor in nature and are not permissible plan expenses. Expenses that fall outside of the fiduciary bucket must be paid for directly by the employer and may not come out of, derive from, or originate from plan assets. The failure to pay an expense from the proper source can result in significant penalties and costs for a plan sponsor.
Settlor Functions vs. Fiduciary Functions
In retirement plan sponsorship, one of the most difficult questions to address is, What are the differences between settlor and fiduciary functions?
Settlor functions are those that relate to the employer’s business, such as the establishment, design, or termination of a plan. All…
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Posted by Jessica Skinner and Steven Kjar on November 14, 2011 |
Fiduciary Responsibilities and How a Plan Sponsor May Transfer Liability
Most plan sponsors understand that they have a fiduciary obligation to prudently administer their retirement plans. What many plan sponsors do not understand is the degree by which their actions constitute fiduciary conduct, the standards they should follow, and the requirements of the law. Perhaps most surprisingly, plan sponsors may not understand that opportunities exist whereby they may transfer some of their fiduciary obligations to other parties.
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