Economy puts focus on retirement plan responsibilities

With the investment markets performing at historically low levels, management of company-sponsored retirement plans is under more scrutiny than ever.

That's the word from Springfield-based Pension Consultants Inc., which is presenting its 13th annual Pension Focus conference May 14-15 at Chateau on the Lake in Branson. The event aims to inform companies' plan managers about trends and new regulations for retirement plans such as 401(k)s.

Keeping up in a down year

Pension Consultants President Brian Allen said one of the main topics of this year's conference deals with handling increased pressure on retirement plans, some of which have lost up to 50 percent of their value in the last year.

"When the markets were returning 10 (percent) or 15 percent a year, nobody thought much about their fiduciary responsibility in sponsoring a plan, but when the markets are down 50 percent, there's certainly heightened awareness on the part of these employers to know if they're subject to claims that they didn't do their job," Allen said. "When the markets are down, people are more prone to make those claims, and employers are more concerned."

Among the featured speakers at Pension Focus 2009 is Sal Tripodi, founder of Colorado-based TRI Pension Services and immediate past president of the American Society of Pension Professionals and Actuaries. Tripodi said retirement plan managers need to be aware of what their responsibilities are to ensure that their company's plan performs as well as possible, even in rough economic times.

"With a lot of plans, the specific investment decision for each participant's account is shouldered by the participant, but the employer still bears the responsibility of making sure prudent investments populate that list of options the employee is choosing from," Tripodi said. "So they have a responsibility to review performance, to look at fees associated with those investments and make sure they continue to evaluate them periodically, so they can limit their potential (legal) exposure."

Legislative changes

Aside from recession-related discussions, the conference also will cover changes to federal regulations for retirement plans. While the rules change somewhat every year, Allen said the shift in regulations for 2009 is more pronounced than usual because of the change in the White House.

One such shift is a set of regulations that former President George Bush tried to enact before leaving office. The changes would have added more requirements for retirement plans to disclose expenses, such as fees to financial advisers and record keepers, to plan participants.

Allen said that because of the complicated nature of the regulations, the Bush administration was not able to hammer out the needed details before the president's term ended.

"... As soon as the new administration came in, they put the brakes on those changes," Allen said. "So we're kind of in limbo on what the new rules are going to be or if there's going to be a dramatic change."

Other changes include new regulations by the U.S. Department of Labor, the Internal Revenue Service and the federal court system that put additional requirements on 401(k) distributions and administration of 403(b) accounts, as well as potential changes to the types of investments that can be included in retirement accounts.

The main reason for the significant changes, Allen said, is a difference in general philosophies; Republicans typically prefer to emphasize company disclosure, while Democrats tend to lean on enforcement through the IRS and DOL.

Tripodi also noted that Congress is "more disposed to oversight and regulation" than in years past and could consider additional regulations.

Allen said it's that up-to-date industry information that makes the conference so valuable to attendees - and one reason why registration figures are basically steady compared to last year's attendance of 102 despite companies cutting back on spending for travel and training.

Jay Smith, business manager for Springfield-based Litton & Giddings Radiological Associates, has attended the Pension Focus conference several times, in large part because of the information it provides and the ability to interact directly with IRS and DOL officials. Smith has registered to attend again this year.

"(The conference) is always very up-to-date," Smith said. "Retirement plan laws are always changing, and by virtue of Pension Consultants having the most up-to-date information, it makes it perfect for us."[[In-content Ad]]