We are your Trusted Advisor! NAIC passes a resolution supporting insurance Experts

Posted on Aug 25, 2010 in Health Care Reform

One of my big concerns about the Patient Protection and Affordable Care Act (PPACA) that passed in March was the creation of “Navigators” to help people find health insurance. These Navigators were not required to be licensed to sell insurance or have any real extensive training. A Navigator could be an Union employee or an employee of your local Chamber of Commerce. My fear was that employers and individuals trying to make decisions on their best choice of insurance would not get sound advice from a highly trained, licensed insurance broker & counsellor.

I’m pleased to report that the National Association of Insurance Commissioners (NAIC) has passed a resolution which defines and recognizes brokers’ roles in the health care industry, as the insurance consumer’s “Trusted Advisor.”

As a part of the Patient Protection and Affordable Care Act, the role of the health insurance Navigator was created in order to communicate health plan enrollment information and provide referrals to insurance consumers. These individuals differ from brokers in that they are not licensed and do not receive the required continuing education to maintain these licenses, as is required of insurance brokers & advisors. This additional role led to the concern that unlicensed Navigators would be performing part of the traditional responsibility of the licensed broker.

Therefore, a resolution was passed on August 17, 2010 to limit the role of Navigators and ensure that our responsibilities as brokers remains upheld. Through the passing of this resolution early this week, Navigators will be limited to directing insurance consumers to licensed brokers and government agencies, thus allowing brokers to maintain their current role in the health care industry.

What this means to you is that you will always have a licensed professional who is there to give you sound, objective advice and help you make wise choices for your insurance protection.

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Will you survive a retirement plan audit?

Posted on Aug 1, 2010 in Industry & Legislative News

Will you survive a retirement plan audit?
How about an employee lawsuit?

You know your business inside and out. But do you know everything there is to know about maintaining your 401(k) plan?

Did you know that a plan fiduciary (YOU, perhaps?) can be held personally liable for a breach of fiduciary responsibility, which may include the plan’s investment choices?

Complying with ERISA requirements can be overwhelming. And even if you have the time to do it, are you sure you have the critical information you’ll need?

It’s essential that your 401(k) vendor and advisor pay attention to fiduciary duties as they affect you as a plan sponsor.

“So what do I look for?” you ask. Here is a handy list for potential improvements:

Replacing underperforming or inappropriate investment options – funds that have underperformed their benchmark and peer group, have style drift issues, or are inappropriate from a risk-adjusted return standpoint must be scrutinized.

Excessive fees at the participant level – are you sure that the fees being imposed on your participants are reasonable? Are more competitively priced, institutional funds being offered or just retail options?

Documentation and due diligence files – a sample Investment Policy Statement and 404(c) form are not enough. Are you being provided with comprehensive due diligence reports and communications that keep you up-to-date with the performance of your plan? Do you understand why your current funds are still in the lineup?

Investment Committee meetings – are you being provided with necessary information to effectively monitor your plan and hold regular investment committee meetings?

Participant direction and education – how are your participants diversifying their assets? Are an overwhelming number of options being presented without much direction? Are your participants being offered a comprehensive savings and advice solution?

Providing a true “select” list of investment options – many 401(k) vendors leave the burden of weeding through funds squarely on the shoulders of the plan sponsor.

The use of proprietary funds or other potential financial conflicts of interest – is your current 401(k) vendor utilizing an unbiased and independent investment selection and review process (or is there an incentive to push one fund over another)?

404(c) compliance – have you reviewed the steps that are required to fully comply with Section 404(c)?

Regular self-audits – have you done one?

Dealing with all the above issues goes a long way toward proving “procedural prudence”. The Department of Labor doesn’t expect you to have a crystal ball, but you ARE expected to act in the best interest of plan participants and make decisions like an expert (you’re an expert, right???).

“So what do I do now?” you ask – this is where we come in. As retirement plan consultants, we specialize in helping companies like you reduce their fiduciary liability and maximize the value of their 401(k) plan. We are looking for a few more great clients – call us to schedule a time to talk about your current plan and how we can help you find areas of concern and areas of improvement.

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