Vantagebenefits Blog


on Thu, 14.04.2016 - 11:58

ERISA 3(16) fiduciaries...ERISA 3(21) fiduciaries...ERISA 3(38) fiduciaries. To a plan sponsor, the fiduciary rules under the Employee Retirement Income Security Act of 1974 (ERISA) can seem like a numbers puzzle with no easy solution. Yet the ERISA fiduciary principles form the foundation for all aspects of investment management and plan administration.

Making sense of the fiduciary rules

Helping plan sponsors decipher who is responsible for the various fiduciary functions and when it may be appropriate to delegate certain duties to retirement plan professionals is one of the most valuable services an advisor can provide to plan sponsors. Advisors can assemble the pieces of the fiduciary rule puzzle for plan sponsors. Download this article, which contains solutions to the following questions:

  • What is a fiduciary?
  • What is an advisor's role in the fiduciary landscape?
  • What types of fiduciary support services are available to plan sponsors?

Click below to learn how you can help plan sponsors see how the pieces fit together. 

solve the fiduciary rule puzzle for plan sponsors






on Thu, 07.04.2016 - 10:45

The highly anticipated Department of Labor (DOL) final fiduciary rule for retirement plans has arrived. If you're a retirement plan service provider and are doing right by your clients, you have nothing to worry about. But how do you know if you're doing what's "right?"

This can be a tricky question, as the answer requires not only understanding the new rule but also how it impacts the way you do business. If you don’t know what “right” is, you could find yourself in a mess of legal and financial trouble.

Key components of the final fiduciary rule

Download this summary document to learn the new rule's key components and its potential impact on those of us who operate in the retirement plan arena. Key components to better help you under the new fiduciary rule include:

  • Who is a fiduciary?
  • What is (and is not) fiduciary investment advice, and who can give it?
  • What exemptions are available under the final fiduciary rule?
  • What options are available for independent advisers in regards to this new rule?

How to navigate the new rule

The encouraging news about the final fiduciary rule is that you have options, depending on your comfort level with knowing and doing what’s “right.” Such options include the following roles for independent advisers and firms:

  • An investment fiduciary
  • A non-fiduciary outcomes consultant

Determine your level of fiduciary comfort and learn how you can find your place in this ever-changing fiduciary landscape. Download the final fiduciary rule summary document today.

Summary of DOL Fiduciary Rule






on Wed, 30.03.2016 - 02:30

Offering a retirement plan comes with many rewards and challenges. The rewards are obvious. Employers and employees win when a retirement plan is part of a corporate benefits program. Cue the challenges: plan administration and asset management. These duties come with very specific fiduciary responsibilities, starting with an understanding of the rules and standards of conduct under the Employee Retirement Income Security Act (ERISA).

Let’s examine 5 common fiduciary ptifalls, the consequences attached, and what to do when the challenges seem to outweigh the rewards. The solution is simpler than you may think.

1. Ignoring conflicts of interest

ERISA states that fiduciaries must act in the interests of the retirement plan participants and their beneficiaries at all times. However, loopholes in the retirement advice rules have allowed advisors and brokers to put the potential for their own profits ahead of their clients’ best interests. Because plan sponsors are ultimately responsible for the fiduciary obligations associated with the plan, they must exercise care in selecting specialized vendors to perform management of plan operations and plan assets.

2. Failing to follow the terms of the plan document

Plan sponsors must operate the plan according to the terms of the plan document to ensure tax-qualified status and prevent a breach of fiduciary responsibility. It is the plan sponsor’s duty to keep the plan in compliance with tax laws. Furthermore, any changes made to the plan document will affect various vendors servicing the plan. Failure to follow the plan’s terms and to communicate any plan changes to the appropriate vendors could lead to mistakes that are costly to correct.

3. Making untimely deposits of contributions

Plan sponsors are required to remit employee and employer contributions to the plan in a timely manner – and correct any late deposits. Untimely remittance leads to time-consuming corrective paperwork, from determining the amount of earnings due on late deposits, to correcting late deposits of participant contributions, to paying excise taxes, to completing a sea of tax forms.

4. Communicating with participants in an untimely manner

Plan sponsors must distribute participant disclosures and notifications in a timely manner and ensure that these notices provide all legally required information. Failure to do so could result in significant consequences. For example, forgetting to issue an annual notice could lead to loss of plan status and limiting (or refunding) contributions made by highly compensated employees (HCEs). Add a layer of complexity to the mix with the challenge of getting employees to participate – and improving participant outcomes – and communication is vital to the plan’s success.

5. Completing the employee census incorrectly

Errors in an employer’s annual census are common but come with serious consequences. Just a few of these errors include:

  • Date of birth – could affect nondiscrimination testing, resulting in costly corrections due to contribution errors
  • Compensation – could affect employer contribution calculations, compliance testing, and HCE status if the wrong definition of contribution is used
  • Deferrals – could result in an incorrect ADP test, tax consequences, and a number of other issues if the deferral amount is applied incorrectly
  • Stock ownership – could affect nondiscrimination testing, as percentage of stock owned is used to determine key employee and HCE status

How to avoid these (and other) fiduciary pitfalls

According to ERISA, liability is personal. While a plan sponsor can manage the operations of their retirement plan, the question is…why place these administrative burdens on themselves and their staff? It is most likely in a plan sponsor’s best interest to select and oversee a professional fiduciary who can focus on running their plan so they can focus on running their business.