MEPs And PEPs For Plan Providers After The SECURE Act.
Some things to consider.

My favorite law school professor, Bernie Corr once said in hi advanced bankruptcy class that the reason we change the bankruptcy law every few years is to give bankruptcy law some business. If Professor Corr was an ERISA lawyer, he'd probably say the same thing about retirement plan laws. The Setting Every Community Up for Retirement Enhancement Act of 2019 (the SECURE Act)is the biggest change in retirement plan laws since 2006 and one of the biggest changes corners the "reinstatement" of open multiple employer plans (MEPs) through something called pooled employer plans (PEPs). This article is for plan providers such as yourselves who are thinking about how PEPs may or may not augment your retirement plan book of business with a lot of points to consider.

To read the article, please click here.

As far as the SECURE Act is concerned, please join me and Granite Group as we discuss the retirement plan changes made by the SECURE Act and how you can take advantage of it as an advisor. Thursday, January 23 at 4pm EST, which will be broadcast here.
EBSA recovers billions for participants.
Hurting participants doesn't pay .

The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) released its program results for 2019. EBSA's enforcement and benefit advisor programs recovered over $2.5 billion in payments to plans, participants and beneficiaries. That's a lot of shekels.

EBSA reported over $2 billion in recoveries from its investigations. Under its Terminated Vested Participant Project, EBSA helped participants collect nearly $1.5 billion in retirement benefits owed to them.

Also, EBSA's criminal investigations led to the indictment of 76 individuals - including plan officials, corporate officers, and service providers - for offenses related to employee benefit plans.
These amounts are very sobering to read and it shows the work of EBSA in clawing back money for participants and getting some creepy fiduciaries indicted.
Investment education is a process, not a result.
It's that simple.

Advisors ask me all the time of the role of education in participant-directed 401(k) plans. Participant directed 401(k) plans that are governed under ERISA §404(c) offer the plan sponsors liability protection based on a participant's gains or losses on their account when they direct their investment.

There have been so many misconceptions that plan sponsors and advisors have had concerning ERISA §404(c) plans. They had this belief that if they just give a mutual fund lineup and some Morningstar profiles to plan participants that they are exempt from liability. ERISA §404(c) protection is about following a process and Morningstar profiles are just not enough education to give to plan participants. You have to provide enough information for participants to make informed investment decisions. On the flipside, education to participants doesn't have to amount to an MBA education, especially if you don't want to offer advice.

I think an effective education component to ERISA §404(c) plans should include enrollment meetings where the characteristics of the plan are discussed, as well as the investment options, and offering the building blocks of financial education to assist participants to get a better understanding on how to choose investments.

Advisors that may have issues in offering education should always consider using some of the online resources out there that do offer advice for a fee.

Also, written materials such as plan highlights and some Morningstar profiles should always be distributed.

Also while many advisors dislike, one on one meetings to participants should always be offered. While most participants will probably shun such meetings, they should always be offered to those that want them because as we know, every participant has a different financial goal and need. One on one meetings offer participant individualized attention on asset allocation and fund choices; it can be an effective means of educating plan participants more than what a general enrollment meeting can offer. It can help participants understand how retirement plan assets relate to their other assets as part of a comprehensive financial plan.

Advisors should always look at education as liability protection because offering participant education helps a plan sponsor minimize their liability under ERISA §404(c). While I always stress education as an important part of the fiduciary process, it's not about achieving a specific result from participants directing their investments. Offering participants investment education is like the old proverb, "You can lead a horse to water, but you can't make him drink." So no matter how great the education component is, there is no guarantee that it will help plan participants achieve a better financial result because like they say, there is no guarantee in life, except maybe death and taxes. The participant who put all his money into a mid-cap fund because he considers it the "average of the market" may still do so even after getting an education at the enrollment meeting and through one on one meeting. As with most things with retirement plans, it's about following a process and not guaranteeing a result.

E-Disclosure is the way to go.
Save trees, save fees.

There are quite a few people who will say that the Department of Labor (DOL) didn't go far enough in their proposed regulations on electronic delivery of plan disclosures. I'm just glad the DOL is now in the 21st century. When talking about e-disclosures, remember that at the heart of it are participant rights and the rights of participants to be informed, many that may still not have access to a computer at home.

More robust regulations allowing e-disclosure will progress over time. My hope for the change in paper vs. electronic notices is hundreds of millions in cost savings. While paper manufacturers will lose out, I believe that participants will gain with more competitive fees, supported by plan providers' cost savings in paper.

Focus on what the competition isn't focusing on.
Great way to show everyone the difference..

When I started my law practice, I started to look at what the competition was doing and I decided to do things differently. Other ERISA attorneys charge by the hour, they charge for every phone call, and I just didn't want to nickel and dime clients potential referral sources. Helping plan providers on the house by providing articles and answering a question went a long way.

As a plan provider, you also need to stand out among the crowd. Look at what other competing plan providers and do things differently because the competition is usually focusing on one area. If I'm a financial advisor, I'd focus on participant education/enrollment meetings. If I was a third party administrator, I'd focus on communication with the plan sponsor. I think those are areas that many providers aren't, just a free suggestion.

Disney World is next.
Registration for all events open including Disney World.

That 401(k) Conference is the most fun 401(k) advisor out there with a price point that won't break your back.

$100 gets you at the regional events (not Disney), 4 ho urs of content to grow your advisory business, lunch, a stadium tour and a meet and greet with a baseball legend. 

Don't forget, our national
conference for March 2020. Family fun at Disney World with a conference that won't break your bank if you're a sponsor or attendee.

The Retireholiks will be recording an episode of their show at our event. 

There will be presentations on the SECURE Act, HSAs, MEPs and PEPs, and social media and marketing to name a few presentations.

Our special guest for the second day of the conference on Wednesday, March 11th is Hall of Famer Goose Gossage. Tuesday's special guest will be announced shortly.

Information on That 401(k) National Conference sponsorship and to sign up is here .

Our first regional event for 2020 will be Friday, April 17th in Houston Texas. Sponsorship information can be found here . Registration link is  here .


  We will be hosting That 401(k) Conference in St. Louis on Friday, May 8th. Sponsorship brochure can be found here, the registration like can be found here.

The last event for the first half of 2020 will hails from Target Field in Minneapolis on Friday, June 5th. Sponsorship information can be found here, the registration link can be found here.
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The Rosenbaum Law Firm Advisors Advantage, January 2020
Vol. 11 No. 1

The Rosenbaum Law Firm P.C.
734 Franklin Avenue, Suite 302
Garden City, New York 11530
Fax 516-368-3780

  Attorney Advertising.  Prior results do not guarantee similar results. Copyright 2019, The Rosenbaum Law Firm P.C. All rights reserved.