Products September 18, 2009

IRS Site Helps Employers Navigate Retirement Plan Waters

Small-business employers looking for basic guidance about the array of workplace retirement plans from which they can choose can now get their questions answered at a new federal Web site.

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Unveiled by the Internal Revenue Service (IRS) in conjunction with a package of retirement savings initiatives from the White House (see “Obama Administration Launches Retirement Savings Initiatives“), the IRS Retirement Plans Navigator is organized to help small-business employers:

  • choose a plan;
  • maintain a plan by making certain the plan retains its tax-qualified status; and
  • correct a plan by using one of the tax agency’s programs set up for this purpose.

The site offers information about plans with IRAs, 401(k) and profit-sharing plans, defined benefit plans, and tax-exempt plans.

The navigator also includes a side-by-side comparison of plan features and a summary rundown of the potential benefits for employers and workers of having a workplace retirement program. 

The site also features numerous links to the IRS main Web site, irs.gov , for further information.

The IRS navigator is available at www.retirementplans.irs.gov.

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Compliance September 18, 2009

DoL Set to Drop Investment Advice Regulations

The Department of Labor is killing the final 401(k) investment advice rule under the Pension Protection Act, according to news reports.

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“We believe the final investment advice regulation published in the January 21 Federal Register went too far in permitting investment advice arrangements not specifically contemplated by the statutory exemption,” said Phyllis Borzi, assistant secretary of the DoL’s Employee Benefits Security Administration (EBSA). Borzi made the announcement at the American Society of Pension Professionals & Actuaries (ASPPA) conference in Washington, D.C. (see “EBSA Sets Out Carrot, Stick Agenda“).

 

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“We share concerns that workers will benefit from quality investment advice,” she said—and then proceeded to express a different sense of what would fulfill that definition. Borzi added, “We are taking a fresh look at the regulation that was issued and are working to bring it more closely in line with the [Pension Protection Act of 2006] statutory language.”

The final rule was published in the waning days of the Bush Administration, and then twice delayed while EBSA sought more comment. It was set to take effect November 18 (see “EBSA Again Extends Effective Date of Advice Rule”).

The controversial provision would allow advisers with potential conflicts of interest—or those whose compensation for providing advice could vary based on the investments recommended—to give advice to participants if they followed certain procedures.

The rule has been met with opposition in Congress, led by Congressmen Rob Andrews (D-New Jersey) and George Miller (D-California), who charged that it would allow for biased advice from investment companies. In July, the House Subcommittee on Health, Employment, Pensions and Labor (HELP) approved the Conflicted Investment Advice Prohibition Act, which essentially counters the DoL regulation (see “House Subcommittee Passes Fee Disclosure, Advice Bills” and “Andrews Introduces Advice Legislation”).

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