For decades, small businesses and their employees have been disadvantaged by the limited availability of high-quality, low-cost retirement plans. But this is all set to change by the end of third quarter this year, when a new rule from the U.S. Department of Labor (DOL) takes effect, seeking to expand the access of Multiple Employer Plans (MEPs). Learn more about the DOL MEP rule and some of the advantages businesses and their employees can realize from participating in a MEP.
Defined contribution (DC) plans were designed to help participants become retirement ready. However, nearly 40 years since their introduction, as people who began their careers in that period are hoping to leave the workforce, retirement readiness still tops the lists of concerns for DC plan sponsors and participants. Many employers sought for years to maximize employee participation, educate employees about diverse investment options and use their 401(k) or 403(b) plans to attract and retain staff. However, evidence shows that two thirds of employees with access to plans are not using them to save.
The Department of Labor “Fiduciary Rule” requires those who advise people on their retirement plans to act in their clients’ best interests when they provide investment advice for compensation. While partially “implemented” on June 9, 2017, the DOL rule’s complete implementation has been further delayed until July 1, 2019. During the interval, however, there are actions employers and other plan sponsors should consider taking now to proactively minimize risk exposure until a final measure is in effect.
At PlanPILOT, we assist clients in not only achieving their goals and satisfying their fiduciary responsibilities today but in continually looking ahead to ensure a dynamic plan and benefit. The industry and the role of retirement plans are evolving so swiftly that, while plan sponsors don’t need to be cutting edge, they do need to take steps to keep up with the changes. The last thing you want is to wake up one day and realize that your plan is stuck in the past.
In April, the US Department of Labor (DOL) released the long-awaited and highly contested final rule redefining who is considered a fiduciary under the Employee Retirement Income Security Act of 1974 (ERISA). This revision was designed to address conflicts of interest in retirement advice by applying the fiduciary standard more broadly, to include everyone who provides investment advice to sponsors and participants in defined contribution workplace retirement plans and individual retirement accounts (IRAs). How will the DOL fiduciary rule affect plan sponsors?