The new regulations regarding ERISA covered retirement plans including 401(k) plans will change the way plans are sold and used. These regulatory changes will continue as the retirement crisis becomes more public knowledge. Plan sponsors will be best served by hiring a professional fiduciary to manage their company plan. This will result in less risk for the plan sponsor and an excellent retire

ment vehicle for thier employees.

The safest policy 401(k) plan sponsors can adopt right now is to avoid the three biggest investment conflicts of interest: 12b-1 fees, revenue sharing, and the little-known but perhaps most deadly issue, directed brokerage.Each creates a self-dealing conflict of interest normally considered a prohibited transaction under the fiduciary standard. Over the years, however, the DOL has carved out exemptions which allow what for centuries was forbidden under trust law (which has been the basis for defining fiduciary duties)

Plan sponsors are going to learn very quickly that they cannot allow their plan participants to pay for the administrative fees of their 401(k) plan. This benefit is vital to the successful retirement of their employees and the employer needs to pay these fees as a benefit to their employees.

Please comment or call to discuss how this affects you and your company.