Mark June 9, 2017 on your calendar. That's the day the lowly IRA entered the retirement plan big leagues. Previously, IRAs had significantly less regulatory oversight than ERISA plans. But with the redefinition of “fiduciary” in the DOL's conflict-of-interest (aka, “fiduciary”) rule, IRAs now fall under the ERISA regulatory umbrella.
What does this mean for plan sponsors? Where will the change be seen by retirement savers? How will financial service providers respond to this watershed event?
Traditional corporate plan sponsors are impacted by the conflict-of-interest rule. This impact will manifest itself primarily in the due diligence process of selecting and monitoring service providers. The size of this impact will be directly proportional to the percentage of service provider fees paid out of plan assets. If the plan sponsor pays all plan fees out of corporate business accounts, the new rule will not apply. The rule only applies to service providers who are paid for out of plan assets.
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Christopher Carosa
Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).
