Podcast Center
Video Center
Webcasts
Resource Center
Events
February 02, 2011 at 07:00 PM
Retirement plan service providers with discretion over plan assets should be fiduciaries, but other providers should be able to use written agreements to define their level of responsibility, the SPARK Institute says.
The SPARK Institute, Simsburgy, Conn. – a group that represents large retirement plan services providers – is trying to get the Employee Benefits Security Administration (EBSA) to rewrite a proposed regulation that was drafted in an effort to clarify which providers are fiduciaries. Fiduciaries have a legal obligation to put the interests of the plans and plan participants they serve ahead of their own
The proposed EBSA rule, 2010-26236, 29 CFR Part 2510, would amend a section of the Employee Retirement Income Security Act (ERISA) that defines when a person who provides investment advice becomes a fiduciary.
Today, to qualify as a plan fiduciary, a person must either have control or discretionary authority over plan investments, or the person must meet a 5-part test described in a 1975 regulation. The person must give advice on a regular basis, have some kind of agreement or arrangement with the plan or a plan fiduciary, and provide individualized advice.
The 5-part test is complicated enough that parties that clearly have violated a fiduciary duty sometimes use it to evade responsibility for wrongdoing, officials say.
