Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Regulation and Compliance > Federal Regulation > DOL


Your article was successfully shared with the contacts you provided.

There’s an “excellent chance” that the Department of Labor (DOL) will finalize its three initiatives dealing with 401(k) fee disclosures before Congress can pass a bill on the issue, says Stephen Saxon, a principal at Groom Law Group in Washington. Saxon says the 401(k) Fair Disclosure for Retirement Security Act of 2007, the bill sponsored by Rep. George Miller (D-California), has little chance of being enacted this year.

The three initiatives DOL is working on now regarding fees “deal with the disclosure of service provider compensation at the plan sponsor and participant level,” says Saxon. Meanwhile, at least a dozen cases involving 401(k) fees are being battled in the courts, all while Congress is holding hearings on the matter. It’s rare “to have Congress, DOL as the federal agency with jurisdiction, and the courts all focusing on the same issue at the same time,” Saxon says, adding that “you can’t just focus on what DOL is doing, you have to understand all three.” The plaintiffs’ bar, like DOL and the Miller bill, “is taking the position that participants have a legal right to all sorts of information [about expenses] that they don’t get,” Saxon says.

The Employee Benefit Research Institute’s (EBRI) 2007 Health Confidence Survey (HCS) found that most American are getting hit with higher healthcare costs. More than six in 10 Americans with health insurance coverage (63%) report they experienced an increase in the costs they are responsible for paying under their healthcare plans in the past year. In response,those respondents said they planned to try to:

  • Take better care of themselves (81% in 2007; 71% in 2005).
  • Talk to the doctor more carefully about treatment options and costs (66% in 2007; 57% in 2005).
  • Go to the doctor only for more serious conditions or symptoms (64% in 2007; 54% in 2005).
  • Delay going to the doctor (50% in 2007; 40% in 2005).
  • Not fill or skip doses of their prescribed medications (28% in 2007; 21% in 2005).

The Internal Revenue Service (IRS) has extended the deadline for compliance with Section 409A of the tax code from December 31, 2007 to December 31, 2008, giving plan sponsors more time to evaluate their nonqualified deferred compensation options. The IRS issued final regs regarding nonqualified deferred comp on April 10. James Klein, president of the American Benefits Council, noted in a statement that “unavoidable errors and inconsistencies would have resulted in onerous and inappropriate penalties imposed on plan participants” if the earlier deadline were imposed.

The American Society of Pension Professionals and Actuaries (ASPPA) is developing a standards of practice certification for recordkeepers. ASPPA has partnered with the Centre for Fiduciary Excellence (CEFEX) for the audit methodology and delivery of the certification. The standards of practice for recordkeeper certification will be similar in structure to those published in 2006 by Fiduciary 360 for fiduciary advisors, managers, and plan sponsors, according to ASPPA. “Since recordkeepers play an integral role in helping fiduciaries fulfill their obligations, it is appropriate to provide a program where they can demonstrate their adherence to the standard,” said Brian Graff, executive director of ASPPA, in a prepared statement.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.