Mark June 9, 2017 on your calendar. That's the day the lowly IRAentered the retirement plan big leagues. Previously, IRAs hadsignificantly less regulatory oversight than ERISA plans. But withthe redefinition of “fiduciary” in the DOL's conflict-of-interest(aka, “fiduciary”) rule, IRAs now fall under the ERISA regulatoryumbrella.
What does this mean for plan sponsors? Where will the change beseen by retirement savers? How will financial service providersrespond to this watershed event?
Traditional corporate plan sponsors are impacted by theconflict-of-interest rule. This impact will manifest itselfprimarily in the due diligence process of selecting and monitoringservice providers. The size of this impact will be directlyproportional to the percentage of service provider fees paid out ofplan assets. If the plan sponsor pays all plan fees out ofcorporate business accounts, the new rule will not apply. The ruleonly applies to service providers who are paid for out of planassets.
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