RCP

The National Institute of Pension Administrators (NIPA) annual conference was held April 26th to 29th in Las Vegas. Based on our conversations with many of the third-party administrators (TPAs) and pension professionals in attendance, it was a beneficial, educational experience for everyone. The majority of these service providers indicated that they are “often the ones on the ‘front lines’ handling issues along with the plan sponsor”. This includes dealing with the growing concerns around missing or terminated participants. Whether you’re talking about a plan termination or managing the terminated participant population within an active plan, there is a fiduciary responsibility to locate and communicate in a timely fashion with plan participants. When the plan sponsor is confronted with these issues, they will often turn to their TPA for assistance.  As a result TPAs are very interested in best practices and solutions surrounding this pressing topic. (more…)

The current economic climate has created many problems for employers. As organizations are forced to lay-off employees, very few of these employees are focused on what they may leave behind—their 401(k) plan for instance.

Studies have shown that the longer a terminated employee leaves their money in their former employer’s retirement plan, the more likely it is that they will become a missing participant.

But who is responsible for missing participants? There is someone in your organization that holds the fiduciary responsibility for the plan itself. However, many retirement plans don’t have any type of trigger that automatically reviews terminated participant information to determine if there have been important changes—for instance, if the address has changed or if the former employee is now deceased. Please don’t assume that your record keeper, third party administrator, investment advisor, accountant, or lawyer holds this responsibility. In rare circumstances you may find a provider who will offer this service, but in the end, the employer is typically responsible for making the best decisions for the plan.  (more…)

While the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) has changed force-out requirements, it doesn’t mean managing mandatory rollovers needs to be difficult. RCP Solutions’ partnership with Wealth Management Systems Inc. (WMSI) provides a one-stop solution to mandatory rollovers. RCP Solutions can help implement an automated rollover solution providing access to a choice of IRA providers that will save money, alleviate administrative burdens and ensure full compliance with the Department of Labor regulations. This program can also be used by plan sponsors who need to terminate a retirement plan and establish rollover IRAs for missing participants.

The landmark decision of the Supreme Court in LaRue v. DeWolff, Boberg & Associates, Inc., No. 06-856 February 20, 2008 (“LaRue”) will be referenced in employee benefits law text books for years to come.

James LaRue filed a suit, alleging that by failing to execute his investment direction DeWolff and the Plan breached their fiduciary duties. As a consequence under ERISA section 502(a)(2), he sought to recover the amount he lost due to that failure. As a result of the Court ruling in his favor, any single participant in a defined contribution plan now has a cause of action under ERISA if fiduciary misconduct causes a loss to his or her account. This brings to light the need for greater care to be taken in the manner in which plan assets are invested and administered. (more…)