03/08/2016
New Retirement Account Rules: What Employers Need to Know

New Retirement Account Rules: What Employers Need to Know

Fiduciary rule changes proposed by the Department of Labor (DOL) could potentially result in lengthy audits, huge fines, or employee lawsuits for thousands of employers—and most don’t know they’re in danger. Whether you have 10 or 1,000 employees, as an employer offering an employer retirement plan, you have fiduciary liability, and it’s essential that you understand how to become compliant with the new DOL rules.

What You Need to Know

The Labor Department’s plan has been in limbo for more than five years. On Jan. 29, the White House said it had received the department’s final proposed rule, but there is still no exact time frame for implementation. Here’s what we do know:

• The DOL has steadily increased its audits of qualified riteirement plans. In 2015, it completed 2,441 civil investigations of retirement plans and assessed monetary fines and penalties in 67% of cases.
• Many employers don’t realize that they are a plan fiduciary.
• Even if you’re not a named fiduciary, like a trustee, you may still carry the legal fiduciary label.
• Many employers are unaware that they are mismanaging their retirement plans.
• Most employers aren’t as concerned about fiduciary liability regarding their retirement plans as they should be.

The broad definition of a fiduciary is anyone using discretion or having control over the administration of the plan or its assets. Currently, traditional brokers are not fiduciaries, but the new regulations will make brokers providing advice fiduciaries.

How do I Manage my Fiduciary Liability?

The good news is that there are ways to limit your personal liability, mainly by:

• Documenting the processess used to carry out fiduciary responsibilities
• Providing sufficient education and information to plan participants
• Hiring service providers like investment advisors to handle fiduciary functions

Financial Planning and Risk Management with OptiFour Integrated Wealth Management

With the DOL increasing compliance audits over the past several years, recovering $696.3 million in fines in the last year alone, now is the time for employers to take a hard look at their fiduciary responsibilities. OptiFour Integrated Wealth Management can help. We have provided risk management and financial planning and implementation throughout Washington, D.C. for the past 25 years. Our financial planners are ERISA 3(21) and 3(38) fiduciaries. For more information on the DOL retirement plan rules, please visit our homepage or contact us today. Stay tuned for our webinar series on the DOL rules.

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