Service providers continue to be the focus of DOL guidance —either because the guidance is directed at them or because they bear the burden of complying with the guidance. For example, the DOL continues to work on its fiduciary advice regulation, which will directly impact service providers to retirement plans and particularly to 401(k) plans. In terms of a “burden,” the DOL has issued an advanced notice concerning projections of retirement income on participant statements. While the legal responsibility for those projections will be placed on plan sponsors, the practical responsibility for compliance will be placed squarely on the shoulders of recordkeepers.

In addition, the Department is investigating service providers—including recordkeepers, investment advisers and broker-dealers—on a variety of issues. For example, the DOL is currently investigating a number of recordkeepers concerning their handling of abandoned plans. 

There have also been recent complaints and court decisions concerning providers. For example, a complaint was filed against Fidelity for its practices in handling “float” on contributions and distributions and a recent court decision involved Transamerica’s recordkeeping division on a number of issues, such as the removal and replacement of investments in its offering.

Because of this increasing focus on service providers—and because of the increasing role of service providers in the delivery of 401(k) and 403(b) plans, we believe that the practices of service providers will continue to be closely scrutinized.

This newsletter is intended to help service providers understand the ERISA compliance burdens and their potential consequences.

The newsletter contains articles on the following topics:

  • SEC Staff Examination Priorities – Are There Changes Ahead for Unregistered Plan Recordkeepers
  • 408(b)(2) Change Disclosures
  • "Closing" Thoughts: Practical Tips for Service Providers in Winding Up a DOL Investigation
  • Why the IPS Should Address AAMs
  • Simple Steps to Effective Risk Management
  • Retirement Income Projections: The DOL's Notice
  • Fiduciary Obligation to Select Appropriate Share Classes
  • Around the Firm

 

Source: Client Newsletter
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