Category Archives: www.ccrs.biz

25 Oct

Fees Can Be Touchy Subject for Advisers

October 20, 2014

No one wants to talk about it, but everyone wants to know: How do other retirement plan advisers arrive at a fee for their plans? Here, some advisers weigh in on their methods.

The basis of compensation—flat fee or using a percentage of plan assets—is one of the biggest dividing lines in determining fees. More advisers seem to be using a flat fee to charge institutional retirement plans for their services, but they might wind up with comparable fees in the end.

Masood Vojdani, president and CEO of MV Financial in Bethesda, Maryland, works on an asset-based compensation model until a plan hits $100 million. “If plan assets become too large, a flat fee is the only way to remain competitive in pricing,” he tells PLANADVISER.

Up to that size, Vojdani turns to quantifiable factors such as the size of the assets, number of participants, level of service and hours of service dedicated to the plan to calculate a fee. Investment strategy and active management of the plan’s portfolios are also considered, since they require the firm’s time and staff service.

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02 Oct

DoL Will Allow for Electronic Disclosure to Participants

The Department of Labor’s Employee Benefits Security Administration (EBSA) has issued an interim electronic disclosure policy for its participant fee disclosure regulations.

The upcoming participant fee disclosure regulation, set to take effect May 31, 2012, requires employers to disclose more information about plan and investment costs to workers in qualified plans. There has generally been support for allowing electronic disclosure from the industry (see “ASPPA Sees “Overwhelming” Response for Electronic Disclosure”).
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02 Oct

DoL Discusses Participant Fee Disclosure Regs

The U.S. Department of Labor held a Webcast earlier this week to summarize its final fee disclosure regulations and answer questions on the rules.

Michael Del Conte, Employee Benefits Law Specialist with the Office of Regulations and Interpretations in the Division of Regulations, noted a plan sponsor may use providers’ assistance with providing participants fee information and explained under the innocent fiduciary provision of the regulations, the sponsor will not be held liable for incomplete or inaccurate information provided by a service provider if the sponsor used the information reasonably and in good faith in disclosures to participants.
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16 Jun

Who is The New Fiduciary?

The Department of Labor’s (DoL) proposal for a new definition of fiduciary was discussed at the PLANSPONSOR National Conference—and a representative from the DoL was present to add his viewpoint.

Michael Davis, Deputy Assistant Secretary at the DoL, today began by saying how the concept of fiduciary is the core component of the Employee Retirement Income Security Act (ERISA).  ERISA was created to protect participants and their assets, he said, and the fiduciary serves as the umbrella for these protections. The original five-part test to determine if one is acting as a fiduciary (the advice is individualized, provided for a fee, provided on a regular basis, pursuant to a mutual understanding between the plan sponsor and adviser, and the advice will form the primary basis for the plan’s decision-making), is being overhauled, Davis said, to better protect plan sponsors—particularly sponsors of smaller plans.
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16 Jun

Many Employers Feel Responsible for Benefits and Advice

Slightly more than half (53%) of employers feel responsible for providing financial vehicles, as well as education and advice, to help their employees have a secure retirement, according to Bank of America Merrill Lynch.   
The Workplace Benefits Report from Bank of America Merrill Lynch examined the role of financial benefit plans in employers’ talent management strategies and in the overall financial well-being of their employees.
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31 Dec

DoL Broadens Fiduciary Net

For the first time in a generation, the Labor Department has taken another crack at the definition of a fiduciary under the Employee Retirement Income Security Act (ERISA).

The proposed rule was unveiled today by the Department of Labor (DoL), which noted that its adoption “would protect beneficiaries of pension plans and individual retirement accounts by more broadly defining the circumstances under which a person is considered to be a ‘fiduciary’ by reason of giving investment advice to an employee benefit plan or a plan’s participants.”
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31 Dec

IMHO: The Measure of the Plan

December 16, 2010 (PLANSPONSOR.com) – Not so long ago plan sponsors gauged the success of their defined contribution offerings by a single metric; participation rate.

It’s not that they didn’t pay attention to other criteria, but participation rate is objective, easy to calculate and, certainly for a voluntary savings program, it’s not an inappropriate gauge of the program’s perceived value.
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