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DOL FAQs Guide Compliance Efforts during Fiduciary Rule Transition Period

June 6, 2017

Authors

benefitsbclp

DOL FAQs Guide Compliance Efforts during Fiduciary Rule Transition Period

June 6, 2017

by: benefitsbclp

The Department of Labor has issued guidance in the form of Frequently Asked Questions to help firms and their advisers impacted by the Fiduciary Rule know what is expected on and after June 9, 2017, on and after January 1, 2018, and during the period between (the “Transition Period”).  We’ve outlined a few of the highlights below:

As of June 9, 2017, firms and their advisers must comply with the “Best Interest Contract Exemption” and the “Class Exemption for Principal Transactions in Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs”.  However, fewer conditions must be met to comply with these exemptions during the Transition Period.

As described fully in the Fiduciary Rule, the “impartial conduct standards” generally require fiduciaries to make recommendations that are prudent, loyal, and free from material misrepresentation and to receive only reasonable compensation for such recommendations.  The impartial conduct standards do

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Fiduciary Rule Under Review – Delayed Applicability Date

March 1, 2017

Authors

Katharine Finley and Chris Rylands

Fiduciary Rule Under Review – Delayed Applicability Date

March 1, 2017

by: Katharine Finley and Chris Rylands

In a prior post, we covered President Trump’s order directing the Department of Labor to review the new regulation and, as it deems appropriate, to take steps to revise or rescind it.  The Employee Benefits Security Administration (“EBSA”) has taken the first step in response to that order by proposing a 60 day delay in the applicability date. The final rule had an applicability date of April 10, 2017.  Likewise, the prohibited transaction exemptions (“PTEs”) included in the final rule, such as the Best Interest Contract Exemption, had an applicability date of April 10, 2017.

In light of the President’s prior order, EBSA has released the text of a proposed rule, to be published on March 2, 2017, delaying the applicability date of the final rule and the PTEs by 60 days.  EBSA noted that there were only 45 days until the rule and the PTEs became effective

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Are You My Fiduciary?

May 5, 2015

Authors

Lisa Van Fleet

Are You My Fiduciary?

May 5, 2015

by: Lisa Van Fleet

Baby DuckHow many of you remember the classic children’s’ story “Are you My Mother?” by P.D. Eastman?  In that delightful story, we follow a confused but determined baby bird who is looking for his mother.  He sets off to find her, asking various creatures along the way (a dog, a cow, a plane) whether they are his mother, and in the end happily finds his way beneath her protective wing.

The parallels between this story and the proposed Conflict of Interest Regulations are clear (at least to some of us).  The proposed guidance examines the various service providers encountered by retirement plans and IRA owners, as well as their participants and beneficiaries (“retirement investors”) and evaluates whether or not such service providers are fiduciaries who offer a protective wing.  Moreover, the guidance expands

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Have Missing Participants? The DOL Says, “Google Them!”

August 18, 2014

Authors

Chris Rylands

Have Missing Participants? The DOL Says, “Google Them!”

August 18, 2014

by: Chris Rylands

Missing PersonsLast week, the DOL released Field Assistance Bulletin 2014-01 which updated its 10-year-old guidance on how to deal with the accounts of missing or unresponsive participants and beneficiaries in a terminating defined contribution plan that does not have annuity options.  The 10-year-old guidance was largely rendered moot because of the discontinuance of the Social Security Administration and IRS letter forwarding programs, which were prominent features of that guidance.

The DOL takes this seriously.  As the FAB notes:

Some search steps involve so little cost and such high potential for success that a fiduciary should always take them before abandoning efforts to find a missing participant, regardless of the size of the participant’s account balance. The failure to take such steps would violate the fiduciary obligations of prudence and loyalty, as

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Proposed Rule Re-defining ERISA “Fiduciary” Delayed (Still)

July 30, 2014

Authors

Lisa Van Fleet and Denise Erwin

Proposed Rule Re-defining ERISA “Fiduciary” Delayed (Still)

July 30, 2014

by: Lisa Van Fleet and Denise Erwin

Regulations and RulesBroker-dealers and financial advisers may have gained some breathing room as a congressional battle to broaden ERISA’s definition of “fiduciary” loses steam.  In the following discussion, we will summarize the current state of that battle.

At issue is the innocuous-sounding “Conflict of Interest Rule” proposed by the Employee Benefit Security Administration (“EBSA”), that has nonetheless sparked searing critiques from the investment advice industry, which contends it could dramatically increase costs and reduce access to quality investment advice for millions of American workers.  The re-proposal of the controversial rule has been delayed again, this time until January 2015, well after the mid-term elections in November.  Assuming a six-month comment period and six months of hearings to develop final regulations, the final rule could be up for

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DOL Updates Late 5500 Correction Program

February 6, 2013

Authors

benefitsbclp

DOL Updates Late 5500 Correction Program

February 6, 2013

by: benefitsbclp

Last week, the DOL published a comprehensive update to its Delinquent Filer Voluntary Correction (“DFVC”) Program in the Federal Register.  A little background:

  • The Secretary of Labor has the authority to asses civil penalties of up to $1,100 against a plan administrator who fails or refuses to file a complete and timely Form 5500 (plan annual return/report);
  • The DOL first adopted the DFVC program in 1995 to encourage plan administrators to voluntarily correct late Forms 5500 by offering the opportunity to file and pay a reduced penalty (which was capped on a per year and per plan basis); and
  • The DVFC was last updated in the Federal Register in 2002; however, the Program has been updated periodically since 2002 to reflect the adoption of certain technical changes (including changes associated with electronic filing of Forms 5500 and allowing for online payment of the DFVC penalty).
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DoL Representative Sheds Light on Enforcement Priorities

February 1, 2013

Authors

benefitsbclp

DoL Representative Sheds Light on Enforcement Priorities

February 1, 2013

by: benefitsbclp

A representative from the Atlanta Regional Office for the Department of Labor recently spoke at an Atlanta Bar Association luncheon and provided some insight into the Employee Benefits Security Administration’s enforcement priorities and some other interesting facts:

  • With regard to the need for fiduciary training that we wrote about previously, the representative confirmed that investigators generally only require proof of training if the plan sponsor/administrator has agreed to receive training as part of a settlement agreement following an audit.  However, they generally will inquire as to whether the plan sponsor/administrator has had fiduciary training as part of a routine audit.
  • The representative also confirmed that EBSA has started to audit for health care reform compliance (at least for the provisions that are currently effective).
  • They are also looking at HIPAA compliance for both plan sponsors and service providers, and particularly HIPAA portability (e.g., creditable
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