Trust Updates Archive

Pensions 401k SEC Banks Trusts Labor Regulation News Fiduiciary DOL & SEC Join Forces to Focus on Fees

(July 31, 2008--Chicago, IL) -- Failure to properly disclose pension fee arrangements can result in a a double whammy for plan fiduciaries.

The U.S. Department of Labor and the†Securities and Exchange Commission on July 29 announced an agreement to share information on pension plans, providing both agencies with more information on plan activities. The announcement comes just days after the DOL released its 401k fee disclosure proposal, which basically requires fiduciaries to provide more information to more participants.

While most industry groups favor enhanced fee disclosure and information sharing, there are fears that the moves may unfairly raise fiduciary liability.

"Regulations should not impose any liability on plan sponsors for failing to provide information that is not available to the plan sponsor," says a spokesman for the Washington, DC-based ERISA Industry Committee.

The DOL is prepared to back up its fee-disclosure priority with stiff fines, even when federal courts won't. On June 23, the DOL, in conjunction with the United States Attorneyís Office in San Diego, reached a settlement with Unum Group, a Tennessee-based insurance provider. Unum, along with MetLife and Cigna, was a party to a consolidated class action in New Jersey that was dismissed in January 2008. Chief Judge Garrett E. Brown, Jr., of the U.S. District Court of New Jersey, rejected the idea that the insurance companies needed to disclose the fees that were at the heart of the DOLís settlement with Unum.

SEC Chairman Christopher Cox says, "enhanced coordination of the SECís investor protection efforts and the DOLís regulatory responsibility for pensions and 401(k)s will greatly benefit the millions of hardworking Americans who are saving and investing for their retirement as well as those who have already retired."

The SEC has aggressively prosecuted corporations that fail to disclose pension fee arrangements in their filings with the agency.
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For more on this the DOL & SEC agreement and the fee disclosure rule , see the upcoming issue of Trust Regulatory News.

No statement in this issue is offered as or should be
construed as legal opinion or advice
.

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