Plan sponsors, often in the Department of Labor's crosshairs, will have the chance to turn the tables on regulators next month.
The DOL's Advisory Council on Employee Welfare and Pension Benefit Plans will host a symposium in Washington, D.C., exploring key trends affecting sponsor liability and the massive movements of cash from employer-sponsored programs to individual accounts.
Specifically, the event is aimed at soliciting perspectives on IRAs and other savings accounts that are not covered by ERISA. Defined contribution enrollees often roll their 401(k)s over to IRAs when they switch jobs. The DOL wants to know what's compelling enrollees to leave assets in or out of DC plans. Fees, the quality of investments and personal control are all factors influencing trends the DOL hopes to better understand.
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Plan sponsors may or may not have an interest in keeping participants' assets in their plans, given different perspectives on how attrition affects investment levels and administrative costs of a plan, which are split up among all enrollees. Then there is the question of how to communicate options to enrollees, and what unintentional liabilities may be borne of well-intended mandates.
The council will also try to gauge the fallout of outsourcing of plan service responsibilities, either partially or altogether.
More and more, sponsors are relying on third-party entities to negotiate the complicated process of plan design, implementation and management. A lot of what companies used to do internally is now being done by outside specialists. Outsourcing fund selection and overall investment strategy — responsibilities traditionally overseen by internal investment committees — appears to be an emerging trend. Smaller companies are also trending to multiple employer plans as a way to shed the burden of benefit management, freeing up capacity to focus on core business missions.
Plan sponsors and service providers are generally in need of greater clarity on how legal and risk liabilities are shared when third parties are involved in benefits programs at any level.
Finally, this year's symposium will take up a matter related to 408(b)(2) regulations. Specifically, the council is examining the status of compensation and fee disclosures of Pharmacy Benefit Management organizations.
This year's meeting will begin Tuesday, June 17, and run through that Thursday. Those wishing to formally address the council should inform the DOL of their intentions to do so by June 10.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
