Navigating the Complexities of Keeping Your Company's Retirement Plan Compliant with ERISA and DOL Regulations: Is a Specialized Advisor a Necessity?

The landscape of employer-sponsored retirement plans is rapidly evolving, with increasing scrutiny from both the Department of Labor (DOL) and the courts. ERISA retirement plan litigation is on the rise, and the DOL is intensifying its audit efforts, leaving plan sponsors facing heightened risks and potential liabilities. Amidst this complex regulatory environment, a critical question emerges: should plan sponsors consider hiring a specialized retirement plan advisor to oversee retirement plan fees?

The Growing Need for Expertise

The answer is increasingly a resounding "yes." Here's why:

• ERISA Litigation on the Rise:?Lawsuits alleging excessive retirement plan fees, conflicts of interest, and breaches of fiduciary duty are becoming more common. Plan sponsors are facing allegations that they haven't acted in the best interests of their participants, resulting in costly legal battles and potential financial penalties.
• DOL Audits Increasing:?The DOL is focusing on plan fees as part of its audit process, with a particular focus on uncovering potential conflicts of interest and excessive administrative expenses. This scrutiny can lead to costly penalties and corrective action requirements.
• Complexities of Retirement Plan Fees:?Retirement plan fees can be intricate and challenging to decipher, with a range of structures and charges that are often hidden or opaque. Plan sponsors may struggle to understand the true cost of their plans and whether they are getting the best value for their employees.
• Navigating Regulations:?Keeping up with the ever-changing landscape of ERISA regulations is a daunting task. Specialized advisors possess in-depth knowledge of the latest regulations and can help plan sponsors ensure compliance, minimizing legal risks.

The Role of a Specialized Advisor

A dedicated retirement plan advisor can provide valuable assistance by:

• Fee Negotiation:?Advisors can help plan sponsors negotiate favorable rates with plan providers, ensuring they are not overpaying for services.
• Due Diligence:?Advisors conduct thorough due diligence on plan providers, analyzing their track record, fees, investment performance, and any potential conflicts of interest. This helps identify red flags and potential fiduciary breaches.
• Monitoring Expenses:?Advisors monitor retirement plan expenses on an ongoing basis, flagging any red flags or areas of concern that may indicate potential fiduciary breaches.
• Compliance Support:?Advisors guide plan sponsors through the complex world of ERISA regulations, ensuring their plans comply with the latest rules and minimizing compliance risks.
• Conflict Resolution:?Advisors can assist in resolving fee-related disputes with plan providers, protecting plan sponsors from potential legal challenges.

The Bottom Line

While employing a specialized retirement plan advisor may seem like an added expense, the benefits outweigh the costs. By leveraging an advisor's expertise, plan sponsors can:

• Reduce Legal Risk:?Minimize the risk of lawsuits alleging excessive fees or breaches of fiduciary duty.
• Avoid DOL Penalties:?Ensure compliance with DOL regulations and reduce the likelihood of costly audits and penalties.
• Optimize Plan Performance:?Obtain better value for plan assets and ensure employees are receiving the best possible benefits.
• Focus on Core Business:?Free up valuable time and resources by outsourcing the complex task of retirement plan fee oversight to a qualified expert.

In today's increasingly litigious and regulatory environment, hiring a specialized retirement plan advisor is no longer an optional luxury but a prudent investment that can safeguard your plan sponsors' reputation, finances, and employee wellbeing.

If you feel that your retirement plan is at not as good as it could be and are interested in mitigating your fiduciary risk, and would like a professional to partner with you, give us a call at 210-998-5008 or email us at [email protected].

Gil is the Director of Retirement Plans at Platinum Wealth Solutions of Texas specializing in retirement plans for companies, executive benefits programs and retirement planning for business owners, and individuals. He is chartered retirement plan counselor CRPC? and a certified plan fiduciary advisor CPFA?.

Securities offered through Osaic Wealth, Inc. member FINRA/SIPC. Osaic Wealth is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth