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COMMUNITY:
ERISA Fee Disclosure Forum |
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The new ERISA vendor management rule is nearly upon us. Businesses and non-profit foundations that sponsor qualified retirement plans will be hit hardest. The impact on them will be intense and the implications far reaching.
Described in ERISA section 408(b)(2) as the "Fee Disclosure Rule", it demands a radical change in the method used for decades by plan sponsors to select and manage their plans' service providers. It permanently alters the way sponsors acquire and maintain such services as investments and third party administration.
The ERISA Fee Disclosure Forum provides clarity to sponsors about how the new rule will affect them and how to adapt to the changes it requires.
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Goals and Objectives of the Forum... |
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• Purpose
The new ERISA Fee Disclosure Rule (the "Rule") is effective April 1, 2012. On the surface, the Rule seems simple enough. It requires new behaviors from both plan sponsors and the vendors that serve ERISA retirement plans.
Vendors must...
- Make much more detailed disclosures to their plan sponsor clients than they have been required to make in the past;
- Provide comprehensive information about their compensation; and
- Reveal both direct and indirect sources of revenue.
Plan sponsors must...
- Prove they understand the new vendors' disclosures;
- Determine if the disclosures are adequate;
- Report to the vendor, and if needed, the Department of Labor if the disclosures are not adequate; and
- Test and document the reasonableness of their plan's fees.
While corporations have long used professional supply chain management systems to hire and manage their vendors, most ERISA plans have not. That same type of professional system will be required to comply with the Rule.
While the Rule is simple in concept, it imposes radical changes on service providers and heaps new burdens on retirement plan sponsors.
Thought leaders in the pension community, officials at the U.S. Department of Labor, corporate attorneys, and employees' rights groups fear that vendors will downplay the cataclysmic change in behavior that the rules impose on plan sponsors.
Unaccustomed to the practice of professional supply chain management, plan sponsors need unbiased information on how to change obsolete vendor management habits quickly and properly. The Rule requires it.
Resources and opinions about how sponsors can close the huge information gap that currently exists with their vendors are available free of charge here at the ERISA Fee Disclosure Forum. register now
None of the resources and opinions available on the Forum were developed or sponsored by any vendor of services that would appear in a retirement plan's supply chain.
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• Benefits to Members
The ERISA Fee Disclosure Forum offers retirement plan sponsors a unique way to prepare for a very different world.
The methods for evaluating vendors, for so long a haphazard process throughout the retirement plan community, will require bold and accurate decision making in a very short period. The law that ushers in the new world will not permit sponsors to rely on vendors for those decisions.
Resources to members of the Fee Disclosure Forum include:
- Free webinars on compliance with the new ERISA 408(b)(2) Rule;
- White papers on vendor management practices;
- Case studies of successful installations of fiduciary supply chain management systems;
- Steps to take if your required analysis of your vendors' disclosures turn out to be inadequate;
- Pitfalls to avoid in the transition from a vendor dominated era to an era of unmatched accountability;
- Ideas on how to avoid the prohibited transaction that lurks in ERISA 408(b)(2);
- Guidance on how to ensure that your plan complies with the new Rule; and
- Interaction with peers online.
Enjoy the above benefits and more. register now
None of the resources and opinions available on the Forum were developed or sponsored by any vendor of services that would appear in a retirement plan's supply chain.
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If you are not a member of the ERISA Fee Disclosure Forum, join now. There is no charge!
For information on how to get your vendor management system certified for compliance with ERISA read the FAQ or please contact us now.
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