Educational Articles

Should the new definition of fiduciary go into effect, there will be more registered representatives (“reps”) held to a fiduciary standard of care who were previously prohibited from operating in a fiduciary role by their Broker-Dealer (“B-D”). As such, B-Ds will have to make one of the following decisions: View Decisions.
The Statute of Limitations has become a hot topic since the Supreme Court's ruling in Tibble v Edison. Ironically, the Statute of Limitations does provide a method to reduce or mitigate fiduciary risk for decisions from 6 to 3 years if full disclosure is adopted. Learn how by clicking here.
Determining and documenting fee reasonableness is critical to avoiding a prohibited transaction claim that would require the fiduciary to reimburse the plan for direct and indirect fees deducted from plan assets. The process to determine and document fee reasonableness was address in the preamble to the regulations but there are best practice strategies that assist with establishing procedural prudence and a strong defense. For more information on those best practice strategies click here.
Proper Benchmarking Prevents Service Providers from Receiving Less than they more.
408(b)(2) imposed new disclosures but also required action by the responsible plan fiduciary ("RPF") to determine if the disclosures were "complete" so the RPF could draw conclusions about conflicts and fee reasonableness. Unfortunately, too few RPFs and covered service providers have created a formal process to document compliance with this DOL expectation. To view our article click here.
NOTE: FRA PlanTools does provide custom 408(b)(2) checklists with a guide to assist with this assessment process. For more information on the Checklist call David J Witz, AIF®, GFS®, CEO/Managing Director at 704-564-0482 or
The DOL and plaintiff firms will be evaluating the 2012 audit results for trends and vulnerabilities among RPFs and CSPs for targeting DOL audits and plaintiff litigation activity in 2014...To read the full article click here.
The new Advisory Opinion (“AO”) 2013-03A is another step towards clarity on revenue sharing; yet, many questions remain...To read the full article click here.
How to find the right Advisor for your plan. To read the full article click here.
With 408(b)(2) Disclosures in Hand, What’s Next? This article authored by David Witz for Whitfield Elliott, a boutique CPA Auditing firm's On Track Newsletter. This article focuses on specific actionable steps a responsible plan fiduciary must now take since the effective date of the plan disclosure rules has passed or what steps should be taken if a change in covered service providers occurs. For a copy click here.
In Bidwell vs. University Medical Center, Inc. (“UMC”), the Sixth Circuit affirmed the judgment of the District Court that ruled a plan fiduciary does not breach their fiduciary duty when a participant’s account balance is transferred to a QDIA without explicit consent. This decision is good news for advisors serving in the capacity of a 3(38) Investment Manager and for plan sponsors that retain their services. For more information, click here.
With 408(b)(2) disclosures now in effect there is an increasing trend in benchmarking and conducting a search for a qualified advisor. Proper advisor benchmarking requires a significant weight given to the facts versus the subjective opinions of others. The obligations to document the files with a process to select all service providers including the advisor is necessary to mitigate fiduciary risk associated with an imprudent service provider selection. For more information click here.
The effective date of the recent fee disclosure requirements under ERISA 408(b)(2) have increased demand for qualified fiduciary services. In response to this demand, many unqualified advisors are now promoting themselves as a fiduciary solution instead of collaborating with a legitimate fiduciary service provider. Impersonating a fiduciary is a high risk proposition for both the plan sponsor and the advisor. Misrepresenting expertise can be used against the advisor in ERISA legal proceedings. It can also be used against the plan sponsor for failing to act prudently in the selection of a service provider. To mitigate this risk, a plan sponsor should engage in a formal search for fiduciary advisor services using a formal Request for Proposal (“RFP”) process with help from ERISA Counsel, their Auditing Firm or an independent consultant that does not accept engagements as a fiduciary. PlanTools™ offers an automated advisor RFP service…the “ERISA Advisor Evaluator.” It is also important that a plan sponsor understand the fiduciary roles an advisor can play in a successful plan before beginning the process. The attached, article, “What Type of Fiduciary Are You” will provide a basic understanding of the primary fiduciary roles an advisor may offer. To access the article click here.
Not all advisors can be experts at a level that can survive the scrutiny expert witnesses must endure, but an understanding of expertise in the legal and academic sense of the term holds lessons for all advisors, no matter how advanced their current practice. For more information click here.
The ERISA Advisor Evaluator (“EAE”) is a request for proposal (“RFP”) system designed to assist plan sponsors or their attorney, CPA or consultant that does not compete for the advisory business to identify, evaluate, interview and select pre-vetted qualified advisors for plan or participant advice level engagements. For more information click here.
July 1, 2012 is the effective date for 408(b)(2). On July 1, 2012 all covered service providers are required to deliver a written description of their services rendered for fees charged. But, what happens if the covered service provider fails to deliver the disclosures to the responsible plan fiduciary on July 1st? This is the focus of the article. To obtain a copy click here.
Fee disclosure is the legal OBLIGATION, reasonableness is the ISSUE. But how do you determine reasonableness? RFPs have been relied on in the past as has surveys, but Benchmarking is the new NORMAL. If you don't benchmark your plan, someone else will and the conclusions may not work to your benefit. Learn more about the value of benchmarking by downloading the attached article.
Attached article was published in the Spring 2012 Plan Consultant magazine published by ASPPA. This is the first part of a two part article on evaluating the qualifications of an advisor’s expertise. PlanTools has built a web-based RFP system which permits plan sponsors, ERISA attorneys, CPAs and a limited number of consultants to use the system to evaluate and select advisors. The release of the RFP system is pending release of the TIAA-CREF Advisor Network which is nearing completion and represents the only independent objective system of its kind to assist plan sponsors identify, rate, score, assess and select a qualified advisor. To read the article click here.
Before 2010 ended, the Department of Labor issued final regulations under Employee Retirement Income Security Act Sections 404(a) and 404(c) requiring the disclosure of investment and expense information to plan participants. To download a PDF copy of this article click here.
FRA/PlanTools released "The Impact of New Required Reporting Requirements" to assist preparers of Form 5500 Schedule C with the task of identifying and assigning the proper codes to services rendered. This report was initially designed specifically to assist users of the PlanTools Expense Analysis and Benchmarking system. Users of the PlanTools system are able to track expenses and assign Schedule C codes as they proceed through the process of analyzing and benchmarking fees. However, it became apparent as we researched the definitions of the codes that little information, direction or instructions were provided that defined the codes adequately to prepare a reliable and relevant report. Upon completing the report we felt it important to share the results with the industry at large to assist all prepares of the Schedule C with information necessary to provide meaningful data. For a copy of the report click here.