Fiduciary risk on deck at ERISA council hearingsNews added by Benefits Pro on August 20, 2014
BenefitsPro

Benefits Pro

Joined: September 07, 2011

My Company

By Marlene Y. Satter

The Department of Labor’s Advisory Council on Employee Welfare and Pension Benefit Plans opened three days of hearings in Washington, D.C., Tuesday on outsourcing of fiduciary liability, among other issues.

The ERISA Advisory Council discusson on outsourcing will focus on identification of current industry practices and trends on the types of services, both fiduciary and nonfiduciary, that are being outsourced; the markets for service delivery; legal ERISA framework and plan sponsor and service provider responsibilities; and best practices in selection and monitoring of outsourced providers, including benchmarking and conflicts of interest.

In addition, it was expected to delve into the differences among the three fiduciary designations under ERISA 3(16), 3(21) and 3(38) and the scope of fiduciary liability in outsourcing; identification of contracting practices for outsourced services; and insurance coverage and ERISA bonding practices of outsourced service providers.

Other areas to be covered in the hearings this week:

Pharmacy benefit manager compensation and fee disclosure. Numerous aspects of this issue will be covered, including scope and types of services; comparison with provision of prescription drug services; compensation; pricing; contractual provisions; audits; and disclosures.

Issues and considerations around facilitating lifetime plan participation. Some of the factors surrounding the movement of participant assets out of defined contribution and defined benefit plans and into non-ERISA-covered vehicles, such as IRAs and plan distributions, will be considered. Among these are the differences between employer and nonemployer-based systems; sponsor attitudes toward retaining employee assets in the plan; the reasons participants choose to move assets; and communications from an employer when an employee leaves the plan.

The council is expected to draft recommendations to be provided to Secretary of Labor Thomas Perez for his consideration.

Not on the agenda for this meeting are the topics of DB plan lump-sum distributions, which was considered by the 2013 council, and DC plan hardship withdrawals, which was considered by the 2012 council.

Originally published on BenefitsPro.com
The views expressed here are those of the author and not necessarily those of ProducersWEB.
Reprinting or reposting this article without prior consent of Producersweb.com is strictly prohibited.
If you have questions, please visit our terms and conditions
Post Press Release