Mutual funds play a major role as investment options for retirement plans as well as for IRAs. Target date, managed payout, absolute return and alternative funds seek to address various retirement related concerns, including, respectively, accumulating retirement assets, providing specified income over time, preserving the value of retirement assets and accessing non-traditional asset classes that may mitigate the effects of market volatility. Mutual fund products, however, no matter how carefully designed to meet retirement accumulation and income objectives, cannot provide guarantees of lifetime income. For this reason, some fund complexes are joining with insurance companies to develop hybrid products linking mutual funds with insurance guarantees. These hybrid products require fund complexes to structure working relationships with insurance companies and both parties to address issues regarding the issuance and distribution of the product under the federal securities laws and state insurance laws. In providing services to retirement plans, fund complexes must navigate complex ERISA fiduciary, prohibited transaction and disclosure requirements.
We help by advising and assisting in connection with:
- Formation, registration and compliance with federal and state securities laws of variable products and retail mutual funds and their investment managers and distributors.
- Drafting and advice regarding fund advisory, sub-advisory, distribution, multi-class, administrative services and participation arrangements and agreements.
- Drafting and evaluating agreements with plan service providers, including with respect to advising on ERISA fiduciary, prohibited transaction and disclosure requirements and achieving risk management objectives.
- Issues peculiar to target date, lifestyle, asset allocation and similar funds of funds.
- Plan sponsor, participant and plan service provider disclosure rules.
- Developing educational materials for plan participants consistent with ERISA’s non-fiduciary educational guidelines.
- Reorganizations of affiliated and unaffiliated variable products and retail funds.
- Requests for SEC no-action relief, IRS private letter rulings and DOL advisory opinions and applications for SEC exemptive orders.
- Responses to inquiries from and inspections by the SEC, DOL, FINRA and other regulators.