Category: Plan Administration
A Prudent Process Protects Fiduciaries
Section 404(a)(1)(B) of ERISA requires a fiduciary to discharge its duties with respect to an ERISA plan "with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of...
Ignoring the IRS Is Not a Good Idea (another example)
On February 23, 2011, the IRS indicated that its 401(k) Compliance Check Questionnaire Project is entering its next phase. As discussed in a prior post , in May 2010 the IRS, through its Employee Plans Compliance Unit, sent letters to a statistically valid sample of 1,200 401(k) plan sponsors...
DOL Announces Delay in Application of Fiduciary Fee Disclosure Rules
Today EBSA (part of the DOL) announced its intention to delay the applicability date of the new feedisclosure rules under Section 408(b)(2) of ERISA, from July 16, 2011 to January 1, 2012. These interim final rules , published on July 16, 2010, require certain pension plan service providers to...
Plan Disqualification Happens If You Don't Follow Basic Rules!
A recent Tax Court case, Hollen v. Commissioner (2011, T.C. Memo 2011-2), offers a stark reminder that the IRS can and will seek to disqualify a tax-qualified retirement plan if the plan sponsor fails to comply with key legal requirements and fails to correct the failure. In Hollen a...
Update Regarding Expanded Definition of "Fiduciary"
The Employee Benefits Security Administration (EBSA) will hold a hearing to consider issues regarding the adoption of a new regulation defining when a person is considered a "fiduciary" by reason of giving investment advice to a benefit plan or to a plan's participants. The hearing will be held on...
Proposed DOL Regulations Expand Meaning of "Fiduciary"
Proposed regulations published last week by the Employee Benefits Security Administration (EBSA), part of the DOL, would modify the definition of "fiduciary" under ERISA by expanding the meaning of the term "investment advice." The DOL explained that the definition of "investment advice" – which has remained unchanged since it...
Using Retirement Plan Assets to Pay Plan Administrative Expenses
We are sometimes asked: when is it okay to use retirement plan assets to pay for plan administrative expenses? The question often comes up in the context of a restatement of the plan document, the preparation of a new SPD or some other project where the costs may be...
IRS Launches 401(k) Plan Compliance Project
This month the IRS is launching a new compliance initiative aimed at the retirement plan community, the 401(k) Compliance Check Questionnaire Project . As part of this project the IRS is asking a random sampling of 1,200 401(k) plan sponsors to fill out a 45-page compliance questionnaire. Although the...
Some Basic Advice to Plan Investment Fiduciaries
Capital markets worldwide have recovered from their 2009 lows, but remain in a protracted period of extreme volatility and we continue to experience wide swings in market sentiment that seem to defy explanation. Though market fluctuations affect all retirement plans with assets to invest, the unstable investment environment is...
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