Publication - 07/29/2013

Drinker Biddle Response to Controversial Yale Letters

Drinker Biddle Memorandum

We have reviewed a number of Yale Law School Professor Ian Ayers' letters to 401(k) plan sponsors, as well as the report of his study. Based on our work for plan sponsors, as well as recordkeepers and other service providers, our conclusion is that plan sponsors should not rely on his letters and study. Instead, they should engage in a prudent process to evaluate the services to their plans and participants, the compensation of service providers, and the costs of those services as well as the costs of the plan's investments.

To read our analysis, please click here. To read our letter accompanying that analysis, please click here.

SEC Approves Adjustments to Dollar Amount Tests for Performance Compensations

Investment Management Alert
Kay A. Gordon, Matthew R. Silver

On June 14, 2016, the Securities and Exchange Commission (SEC) issued an Order approving adjustments to the dollar amount thresholds of the asset under management test and the net worth tests used to determine whether a fund investor or a managed account client meets the “qualified client” standard under Rule 205-3 of the Investment Advisers Act of 1940 (the “Advisers Act”).

Worth the Wait: 457(f) Proposed Regulations for Deferred Compensation of Tax-Exempt Organizations

Client Alert
Robert L. Jensen, Christine M. Kong, Lori L. Shannon, Erik D. Vogt

The Internal Revenue Service (IRS) has issued long-anticipated proposed regulations governing Internal Revenue Code (Code) Section 457(f), which applies to nonqualified, unfunded deferred compensation plans or arrangements established by state and local governments and tax-exempt employers.

Funds Receive Auditor Independence Relief From SEC

Investment Management Alert
Carey Bell, Diana E. McCarthy

The staff of the SEC’s Division of Investment Management has provided temporary relief to the fund industry in connection with audit firm independence and Regulation S-X Rule 2-01(c)(1)(ii)(A) known as the “Loan Rule.”

At Long Last: The IRS Issues Proposed Regulations for Deferred Compensation of Tax-Exempt Organizations and State and Local Governments

Client Alert
Christine M. Kong, Lori L. Shannon

The proposed regulations address some of the uncertainties that have perplexed plan sponsors and practitioners for years.

U.S. Department of Education Issues Proposed Borrower Relief Regulations

Client Alert
John R. Przypyszny, Jonathan D. Tarnow

On June 16, 2016, the U.S. Department of Education (the “Department”) published its proposed regulations (the “Proposed Rule”) regarding Borrower Defenses to Repayment (DTR) and related matters.