Products April 14, 2016

Ascensus Enhancing Its Commission-Based Solution

The changes are designed to reflect the DOL’s new fiduciary regulations.
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Ascensus is enhancing its product platform to provide support for financial professionals and broker/dealers looking to comply with the Department of Labor’s (DOL’s) new fiduciary regulations.

The retirement plan provider is carefully studying the new regulations and will tailor its commission-based solution to be in line with them. Changes are scheduled to be available in the third quarter of 2016, and will be designed to ensure level compensation and a layer of additional fiduciary protection related to the management of a client’s investment lineup.

“Our product platform is designed to help financial professionals and broker/dealers comply with the new fiduciary regulations while minimizing disruption to their businesses,” says Steven Schweitzer, senior vice president of Ascensus’ Strategic Business Support Services. “Our ability to leverage technology and automation to ensure level compensation while offering an open-architecture investment platform and the flexibility to work within a desired business model makes Ascensus the easy choice for financial professionals and broker/dealers who want to comply with and thrive under the new standards.”

While financial professionals and broker/dealers may have had knowledge of various drafts of the new regulations, Ascensus anticipates they will be seeking assistance with the final guidelines as the new rules are reviewed and clarification from the DOL is provided prior to becoming effective.

“We’ve been working with financial professionals and broker/dealers to make sure that they’re comfortable with the new rules and the support we will provide them,” says Kathleen Connelly, Ascensus’ executive vice president of Client Services. “The ability to offer them a comprehensive product platform along with access to our ERISA experts will allow them to feel confident that they are adhering to the new standards as they service their clients.”

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Compliance April 14, 2016

DOL Files ERISA Complaint Against Interactive Marketing Group

A trustee to a profit sharing plan offered by a New Jersey-based marketing firm is accused of abandoning his responsibilities to the plan and its participants. 
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The U.S. Department of Labor (DOL) is asking the courts to order equitable relief for participants in an Interactive Marketing Group profit sharing plan, and to enjoin the plan’s sole trustee from alleged ongoing violations of ERISA Title 1.

The complaint was filed in the U.S. District Court for the District of New Jersey, naming as defendants the Interactive Marketing Group, Inc. 401(K) Profit Sharing Plan and Guruprasad Pai, “the sole trustee of the plan and a fiduciary with respect to the Plan within the meaning of ERISA Section 3 (21)(A), 29 U.S.C. § 1002(21)(A).”

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Complaint documents show the plan in question is an “employee pension benefit plan within the meaning of ERISA § 3(3), 29 U.S.C. § 1002(3) and is covered by ERISA, pursuant to ERISA § 4(a), 29 U.S.C. § 1003(a).” The plan was sponsored by Interactive Marketing Group, Inc., with the last known address in Paramus, New Jersey, and was established on or about January 1, 1987.

“On information and belief, Guruprasad Pai served as the sole trustee of the plan since it was established,” DOL says in its complaint. “Guruprasad Pai was the only individual with signatory authority and the only trustee of the plan, pursuant to ERISA § 3(21), 29 U.S.C. § 1002(21).”

Following inquiries from concerned beneficiaries of the plan, DOL explains that it cannot get a response from Pai, who stopped servicing the plan more than a year ago without naming a successor trustee.

NEXT: Supporting an abandoned plan 

“At all times relevant during this action, Guruprasad Pai was the only fiduciary to the Plan with responsibilities for its administration, distribution of assets and day to day management,” DOL explains. “On information and belief, Interactive Marketing Group Inc., stopped doing business on or before December 15, 2014. Guruprasad Pai stopped performing fiduciary duties on or about [that date] and did not ensure the appointment of a new fiduciary to manage the plan or oversee the distribution of the plan’s assets. The plan has not been formally terminated.”

The plan’s assets are in custody at State Street Bank and Trust Company, which “has been the custodian of the Plan assets at all times relevant to this litigation.” As of May 26, 2015 the value of the plan assets held at State Street totaled $753,309.

“Without a duly appointed trustee or other fiduciary of the plan to instruct an asset custodian to distribute the plan’s assets, the plan’s participants are unable to obtain distributions of funds from the plan,” DOL says.

To solve these issues, DOL wants the court to appoint an independent trustee and fiduciary to administer the plan and distribute the plan’s assets to its participants and beneficiaries, and to order “such further relief that is appropriate and just.” As is customary in these cases, DOL also wants to bar Pai from gaining any new responsibilities for servicing ERISA-covered retirement plans. 

Read the compliant here. 

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