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Regulatory Changes Governing Key Aspects of Qualified Retirement Plans - What you Need to Know

October 18, 2011 Advisory, Finance

As the fiduciary of your qualified retirement plan, you should be aware of important regulatory changes that are scheduled to take effect in 2012. The new requirements are a result of the Department of Labor’s continuing effort to make retirement plan fees, and the services for which the fees are charged, more transparent to you (the plan sponsor) and to the plan participants (your employees).


The Department of Labor has issued several new regulations governing key aspects of qualified retirement plans, regardless of the size of the sponsoring company, including:

Regulation §408(b)(2) – Disclosure to Plan Sponsors

All service providers (financial advisors, third-party administrators, record keepers, actuaries, consultants, attorneys, CPA/accountants) must disclose to you, the plan sponsor, in writing:

  • The services provided, including  the amount of compensation they expect to receive and how the compensation will be paid under the contract or arrangement
  • Whether the provider serves as a plan fiduciary

Regulation §404(a) – Disclosure to Plan Participants

Plan sponsors must disclose to every eligible plan participant all fees participants are paying, whether directly and/or indirectly through their investments in the company-sponsored plan

Complying with the new regulations is mandatory, and answering the following questions can help you identify your potential exposure as a fiduciary.

  1. Do you have a clear understanding of all the fees and expenses for your current plan?
  2. Have you benchmarked your plan within the last year to evaluate if it is competitively priced?
  3. Will you be able to explain and substantiate your plan’s fees to your employees?

If you have questions, consider connecting with Jamey Davidson, CFP®  Vice President – Investments at Davenport & Company LLC (804-915-2780) .  Jamey can provide a complimentary review of your current plan and help ensure that it is in compliance with the new regulations. In addition, he and the team at Davenport can help you prepare to answer questions from your employees regarding the new disclosures.

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