Displaying items by tag: fiduciary

The era of employee-funded retirement began decades ago with the rise of 401(k) plans. Ever since, employers and service providers have been looking for ways to increase participant savings rates within these plans. Research conducted by Empower sheds light on a key to making this happen.

The study found that "engaged 401(k) plan participants are saving at significantly higher rates than that of unengaged participants, demonstrating that getting people involved in their retirement planning is a key component of driving better outcomes."

One way to engage participants is to provide them with access to in-person advice. Yet, not all plan advisors are equipped to deliver advice to all the participants within the plans they advise. Here's where fiduciary support from the plan's recordkeeper can be invaluable.

While partnering with recordkeepers capable of participant-level advice, plan advisors can selectively choose which participants for whom they are best suited to provide advice. The recordkeeper's advice program is an ideal solution for the remaining participants – usually those with smaller account balances or less complex questions.

Fiduciary services such as participant advice are integral to engaging participants, boosting savings rates, and helping them invest wisely. By partnering with the right recordkeepers, plan advisors can enhance the quality and efficiency of these services, benefiting all involved parties.

Finsum: An Empower study shows that engaged 401(k) plan participants save at a higher rate than unengaged participants underscoring the importance of finding ways to get involved in their retirement planning.

The era of employee-funded retirement began decades ago with the rise of 401(k) plans. Ever since, employers and service providers have been looking for ways to increase participant savings rates within these plans. Research conducted by Empower sheds light on a key to making this happen.

The study found that "engaged 401(k) plan participants are saving at significantly higher rates than that of unengaged participants, demonstrating that getting people involved in their retirement planning is a key component of driving better outcomes."

One way to engage participants is to provide them with access to in-person advice. Yet, not all plan advisors are equipped to deliver advice to all the participants within the plans they advise. Here's where fiduciary support from the plan's recordkeeper can be invaluable.

While partnering with recordkeepers capable of participant-level advice, plan advisors can selectively choose which participants for whom they are best suited to provide advice. The recordkeeper's advice program is an ideal solution for the remaining participants – usually those with smaller account balances or less complex questions.

Fiduciary services such as participant advice are integral to engaging participants, boosting savings rates, and helping them invest wisely. By partnering with the right recordkeepers, plan advisors can enhance the quality and efficiency of these services, benefiting all involved parties.

Finsum: An Empower study shows that engaged 401(k) plan participants save at a higher rate than unengaged participants underscoring the importance of finding ways to get involved in their retirement planning.

Anyone say temporarily neutralized bucking bronco? John Elway? Nah. He’s moved on to other career opportunities.

Instead, despite attempts by the DOL to standardize fiduciary practices across financial professionals, they’ll remained sidelined until at least Q1 2023, according to forbes.com.

Stemming partially from two active and related legal cases, the regulation – aimed at creating a universal fiduciary guidance standard – probably will be tabled again. At least that’s the burgeoning consensus among retirement professionals.

Under the Trump presidency, the DOL released PTE 2020-02 in December 2020, according to worldnewsera.com. As a result, investment advice fiduciaries could receive payment linked with rendering fiduciary investment advice, including advice on rolling over the account of a participant in an employment retirement plan to, for example, an IRA.

That was in the aftermath of the Fifth Circuit Court of Appeals decision to overturn the fiduciary rule in 2018 from the Obama administration. The court not only cited it was “unreasonable”, it was said the execution of the rule by the DOL amounted to “an arbitrary and capricious use of regulatory power.”

Within the retirement plan sector, in the aftermath of the 2020 election, many thought the Trump administration’s rule would be deep sixed. Instead, while emphasizing it would review the five part criteria and – if it saw the need – implement changes, the Biden administration allowed it to go into force.

Anyone see the copy desk? It appears the definition of the fiduciary might be in for a rewrite, according to winkintel.com.

At this point, the Department of Labor needs to rewrite its fiduciary definition to all but make all first time advice fiduciary is just about the lone thing still on the table, analysts concur.

In that event, the alternation would pull weight and basically revert the DOL back to its maiden 2016 fiduciary rule, said Brad Campbell, partner at Faegre Drinker law firm. As it stands, the DOL’s package known as the investment advice rule makes rollover advice fiduciary, the site continued.

Valuable investment advice consists of two primary elements. One evolves around a new prohibited transaction exemption. Here, advisors can provide conflicted advice for commissions. The other is a reinstatement of the 1975 “live part test” in order to ascertain that which constitutes advice on investments.

Campbell noted the initiative’s “likely to be a very substantial proposal that will harken back to legal fights of 2016, which the DOL ultimately lost,” according to fa-mag.com.

The DOL, he continued, “is taking the position that fiduciary starts with the initial or rollover conversation. That's a pretty aggressive reinterpretation of what they historically had said, which frankly was ... that most rollovers were not fiduciary,”.

Some major industry lawyers think the DOL is poised to issue the newest fiduciary rule in short order. Bradford P. Campbell, partner at Faegre Drinker Biddle & Reath says that the new rule will be coming this Spring. The new rule is a long-time coming if you consider that they began working on it when Biden took office well over a year ago. According to Campbell, that makes sense, "That's because the issues are hard. To their credit, they're spending a lot of time meeting with people and discussing the issues. I think DOL is just taking time to do the rule as best they can". According to Fred Reish, another partner at the firm, "I've heard from people that they're actually working very hard on it right now ... So it's not like it's been set aside on the top of a desk until somebody gets confirmed".

FINSUM: This would be a big move by the DOL and is likely to catch advisors unaware as with all the volatility this year, this has not been high on the overall wealth management radar.