ATLANTA, Dec. 14, 2011 /PRNewswire/ -- After many delays, companies with 401k plans and their service providers must now finally confront the Department of Labor rules going into effect next year. These new rules require disclosures to both the plan and the participants, and will surely leave a lasting mark on the 401k industry.
ATLANTA, Dec. 14, 2011 /PRNewswire/ -- After many delays, companies with 401k plans and their service providers must now finally confront the Department of Labor rules going into effect next year. These new rules require disclosures to both the plan and the participants, and will surely leave a lasting mark on the 401k industry.
To help plan sponsors with these changes, 401k ProAdvisor, a division of Wealth & Pension Services Group, Inc., is providing needed fiduciary reviews and cost analysis to assist 401k plans in evaluating the new information.
To review the upcoming rules, known as 408(b) and 404(a), retirement plans will now have new due diligence tools in the form of service provider disclosures. These disclosures will help plan sponsors determine if compensation paid to service providers is reasonable, and to determine the extent of previously hidden compensation and conflicts of interest.
Compensation is defined to include "both direct and indirect and applies to the service provider, its affiliates or subcontractors." The Department of Labor's newest bulletin on the subject explains that "because certain services and costs are so significant and present such conflicts of interest, information concerning those services and costs must be disclosed without regards to whether services are furnished as part of a bundle or package." Additionally, service providers must disclose if they are acting in the capacity of a fiduciary to the plan. In many instances, this will be a "no," which will be a surprise to many plan sponsors.
"As a fiduciary, the plan sponsor is duty-bound to understand, review and monitor this newly disclosed information," says William Kring, CERTIFIED FINANCIAL PLANNER™ designee and chief investment officer of Wealth & Pension Services Group, Inc. and founder of 401k ProAdvisor. Unfortunately, for plan sponsors, evaluating this new information against a standard of "reasonableness" as required by ERISA, will be difficult. Also, disclosures to participants will raise alarms as employees realize they are footing the bill for most plan expenses. In fact, according to a recent survey by AARP, 74% of participants do not know they pay for plan expenses.
In instances where the plan sponsor needs outside assistance, ERISA requires that prudent experts are hired. In this role, 401k ProAdvisor, offers its 408b2 Rules Kit™. The kit and consulting services will take the burden off plan sponsors to evaluate the disclosure information that will be forthcoming. Further, 401k ProAdvisor will identify fiduciary breaches, conflicts, cost control issues, and highlight areas that need additional fiduciary follow-up. If necessary, 401k Pro Advisor can negotiate fees across service providers to meet the test of reasonable compensation.
"This is a good day for plan sponsors and participants," says Kring, an ACCREDITED INVESTMENT FIDUCIARY™ professional. "With these new rules and proper fiduciary assistance, retirement plans can improve their offerings for the ultimate benefit of plan participants." For more information on the 408b2 Rules Kit or fiduciary consulting services, call 770-333-0113 or visit http://401kProAdvisor.com.
About 401k ProAdvisor - 401k ProAdvisor specializes in fiduciary services for 401k plans including investment management, investment monitoring, vendor searches, participant education and advice. Using cutting-edge services with a mission to improve participant outcomes, the 401k ProAdvisor team can reduce plan costs, reduce the risk to plan sponsors, improve investment choices, and lower the burden on HR staff.
About Wealth & Pension Services Group, Inc. (WPSGI) - WPSGI is an SEC-registered investment advisor specializing in retirement plan services, wealth strategies, and investment management.
Contact Information:
William Kring, CFP®, AIF®
Wealth & Pension Services - 401k ProAdvisor
770-333-0113
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SOURCE 401k ProAdvisor
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