Plan sponsors encouraged to begin review and implementation sooner rather than later
CHICAGO, April 21, 2016 /PRNewswire/ — The Plan Sponsor Council of America (PSCA) has reviewed the recently released Department of Labor final rule on the fiduciary standard and today issued an analysis of the rule and its impact on plan sponsors and their advisers. To read the analysis, click here.
“This final rule reflects the DOL’s belief that the retirement industry has evolved significantly since the original fiduciary rules were adopted in 1975, given explosive growth in participant-directed defined contribution retirement plans and IRAs nationwide,” said Rich McHugh, Vice President of Washington Affairs. “But the rule also has evolved since re-proposed in 2015 to take into account concerns and suggestions from the industry.”
The new rule establishes broader and stricter fiduciary standards for investment advisers providing services to retirement plans and IRAs and aims to offer additional protection to plan sponsors, plan participants and IRA owners. The rule extends the fiduciary standard contained in the Employee Retirement Income Security Act (ERISA) to investment advisers who until now were not required to adhere to those standards or to contend with ERISA’s prohibited transaction rules. The rule also preserves the ability of plan sponsors to provide important investment education to plan participants.
To lessen, if not eliminate, industry criticism
“The general reaction within the industry is that the revisions to the rule as proposed are helpful and practical, and seem intended to at least lessen, although probably not eliminate, industry criticism about the rule,” McHugh said.
The DOL has prepared and posted a list of the changes that can be found online at http://www.dol.gov/ebsa/pdf/conflict-of-interest-chart.pdf
McHugh will moderate a panel discussion of the new fiduciary rule and provide a Washington Update at PSCA’s 2016 National Conference, set for May 3-4 at the Renaissance Nashville Hotel.
Fiduciary rule panelists are: Steve McCaffrey, Senior Counsel, National Grid USA Service Company, Inc. and Chair of the PSCA Board of Directors; and Christopher L. Robino, Vice President, ERISA Counsel, Boston Financial Data Services. For information on the conference, click here PSCA 2016 Conference.
As the leading association for sponsors of voluntary, employer-based retirement plans, PSCA encourages plan sponsors to review existing relationships with service providers to determine whether those providers should be treated as fiduciaries under the new rule and to revise their relationships accordingly.
Plan sponsors also should carefully review any new written documentation from their service providers in order to comply with the new rule. Although deadlines to implement the rule are not imminent, the work of implementation should begin sooner rather than later.
About the Plan Sponsor Council of America
The Plan Sponsor Council of America (PSCA) is a diverse, collaborative community of employee benefit plan sponsors, working together on behalf of more than six million employees to solve real problems, create positive change, and expand on the success of the employer-sponsored retirement system. With more than 1,000 members representing employers of all sizes, we offer a forum for comprehensive dialogue. By sharing our collective knowledge and experience as plan sponsors, PSCA also serves as a resource to policymakers, the media and other stakeholders as part of our commitment to improving retirement security for millions of Americans. For more information, visit www.psca.org.