July 23rd, 2010
The Department of Labor has released 408(b)(2) regulations which will impose new fee disclosure requirement for service providers effective July 16, 2011. The regulations were published on an interim basis and the DoL has provided a 45 day comment period before the regulation becomes final.
“We are very pleased the Department of Labor has issued regulations addressing the disclosure and transparency of fees,” stated Chris Thixton, Director of Vendor Services. “The industry lacks any sense of standardization related to disclosing information on plan fees,” Thixton added. “Clear and meaningful information will help plan fiduciaries when evaluating different service providers and identifying conflicts of interest.”
The final regulation differs from the initial proposed regulation in a number of significant respects.
- It does not require a formal written contract or arrangement delineating the disclosure obligations; however, disclosures must be made in writing.
- It treats pension plans separately from welfare plans
- It modifies the categories of service providers that must comply
- It relies on full compensation disclosure by service providers to help address conflicts of interest
- It includes a new provision requiring certain providers to disclose separately the cost of recordkeeping services
- It addresses the requirements of section 4975 of the Internal Revenue Code
- The exemptive relief for plan sponsors and fiduciaries is now incorporated into the final rule
The entire rule is available at: http://www.dol.gov/federalregister/PdfDisplay.aspx?DocId=24028
Posted in Bulletins |
July 15th, 2010
If you were an equity investor in the first half of 2010 you may not feel optimistic about the equity markets or the economy as a whole. We do, however, find reason to remain optimistic about both. The economy is growing, albeit slowly, and earnings estimates for S&P 500 companies are strong.
ECONOMIC OVERVIEW
The US economy officially exited the “Great Recession” one year ago. For the past three consecutive quarters (through Q1 2010) GDP has increased and is expected to increase again in Q2 2010. Admittedly this increase in GDP has been slow and modest in size, but positive none the less. We see an economic environment that should foster continued economic growth; namely business inventories are historically low, manufacturing productivity and output have increased significantly over the last several quarters, inflation remains abated, money supply is increasing, interest rates are at historic lows and we even see some positive signs in the employment picture.
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Posted in Bulletins, Company News |
July 15th, 2010
by Steven T. Petty, Ph.D., Senior Research Analyst at Pension Consultants, Inc.
INTRODUCTION
This paper examines various aspects of the national debt of the United States in order to determine if it poses a problem to be seriously concerned with at this time. The focus is on U.S. government debt measures. A general overview of budget deficits and government debt is presented, followed by a discussion of how debt data and statistics can be both insightful and confusing to the general public. Also, an examination is made of the levels of government debt over time and across countries. An analysis and conclusion section is presented that answers the title question of the paper.
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Posted in Company News, White Papers |
July 14th, 2010
On June 10, 2010, the Department of Labor published in the Federal Register the final version of an interim final rule that was published on March 7, 2007, and which was adopted in response to the specific statutory directive contained in section 1001 of the Pension Protection Act of 2006. This directive was to the Secretary of Labor to clarify certain issues relating to the timing and order of domestic relations orders under section 206(d)(3) of ERISA. This final rule will become effective August 9, 2010.
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Posted in Bulletins |
July 12th, 2010
Pension Consultants, Inc. recently responded to the Department of Labor’s request for feedback on two major issues in the retirement plan industry.
The first of these issues is whether and how the government should promote lifetime income products in retirement plans. While our firm recognizes the importance and necessity for participants to properly prepare for retirement, we are not in favor of requiring lifetime income options in retirement plans. Most plans today with annuity rules fail to comply because of burdensome notice requirements; however, we recognize the need for participants to understand the spend down phase. To learn more about this issue and read our entire response, click here.
The second issue was related to new proposed regulations on participant investment advice. The new proposed regulations are meant to replace the final regulations that were issued in January 2009. The DOL has attempted to address concerns regarding the administrative class exemption. We are generally in agreement with the new proposed regulations. We agree with the DOL’s determination to withdraw the final rule which would limit the fee leveling requirement at the individual level, rather than the fiduciary advisor entity level. To view our response, click here.
Posted in Company News |
