SURVEY SAYS: What Regulatory Clarity Are You Most Anxious About?

July 20, 2007 ( - This week we asked readers what regulatory clarity you were most anxious about.

While it was a close finish, the much anticipated regulations on qualified default investment alternatives (QDIA) topped the list, cited by nearly 37% of respondents (good news – we have it on good authority that they are in OMB’s hands even as we type).

The long-awaited and previously deferred 403b regulations made a strong second place showing, noted by nearly a quarter of this week’s respondents (one reader exclaimed, “I just want the IRS to rip off the band-aid already!!” ), followed closely by:

  • participant notifications ( 21.8% ) (one reader noted, “As TPA and CFP(r), clients rely on me to keep them out of trouble, but I’m not positive I’m keeping up with all the participant notifications that need to be made!”) ,
  • automatic enrollment safe harbor ( 20.4% ), and
  • fiduciary adviser ( 17% ).  

The roughly 7% that opted for “other” were, as expected, something of a mixed bag; with 409A, fee transparency, and brokers vs. fiduciaries all cited.   One reader said that the regulatory clarity that was causing them most anxiety was the “lack thereof.” 

However, this week’s Editor’s Choice goes to the reader who, with just a bit of bravado claimed they were “not anxious at all, I’m prepared.”

We have been talking with all of our clients about QDIA, and are anxiiously awaiting the final regs!
403(b) regs are expected to be substanially unchanged from the proposals. Only question remains is the effective date and Treasury has already said that relief will be available for the most onerous rules. On the other hand, the QDIA regs' outcome on several key issues remains a mystery. The fate of capital preservation funds such as stable value, grandfathering, expansion of the type of funds that can qualify beyond mutual funds and those managed by an ERISA "investment mgr" are all very much in play. This is critical guidance and we are very anxious for it to be finalized.
As TPA and CFP(r), clients rely on me to keep them out of trouble, but I'm not positive I'm keeping up with all the participant notifications that need to be made!
A close second is Participant Notifications because that is always a nightmare to comply with while still actually presenting something that can be understood by Participants.
These new regs will have a signficant impact. I hope that the industry is given the appropriate time to implement the required changes to fully support the new regs and our clients.
I believe they are expected to be announced on July 35th?
The advising role is so crucial in making "self directed" plans ....well... self directed.So many of our employees are sold on the 401(k) investment concept, but have no clue as to how to invest and we continue to err on the side of caution when doling out advise. We need some very specific criteria by which we can evaluate the appropriateness of those we select to advise our employees.
My firm is CEFEX certified as an Advisor to ERISA plans AND as a Fiduciary Advisor under the PPA. I am not anxious about anything.
403bs - 1. would like elimination of all differences between 403bs and 401ks, 2. Insurance comapnies have ripped off participants for too long and taxpayers are paying for it! QDIA - Everyone is forgetting that the target date funds suffered 3 consecutive years of RED INK before the stock market rebounded bringing returns back into positive territory.
I just want the IRS to rip off the band-aid already!!
more than annual reporting
4 of the 5 are impoartant but the QDIA guidance needed immediately as more and more plans are considering automatic enrollment (even before safe harbor). The proposed regs are not bad - just needed some tweaking - shame two constituencies started fighting. It's really the employer's call.
I'm not sure "clarity" is what I'm looking for here. I'm just real curious why the DOL's taken so long to finalize these regs, regs that the law required be finalized by mid-Feb.
It's a struggle to get plan sponsors to take that BIG step from philosphically agreeing with the concept of auto enrollment or QDIA to actually implementing one or both. They believe in it but not enough to do anything about it. It's like the guy who is always talking about politics and then doesn't go vote.
What I want to know is who is going to pay for all of the new notice requirements? Will there be a fee charged to send a notice out to the participants about the fees that are being charged?
We want to terminate our frozen 403(b) plan.
Last I heard, we are expecting final guidance on benefit statements in August. At the same time, we are forging ahead with our second phase of redesigning our statements to comply. It's tough being confident with the designing without finalized direction.
Waiting to see if Satble Value Fund makes the cut. Not sure at this time which default fund will be elected for auto enrollment feature which is in works but have some backers for Stable Value.
As with most things "federal", I anticipate minimal clarity, more questions than answers, and prolonged anxiety.
As a benefits consultant, without any responsibility for my clients recordkeeping, I don't want any part of fiduciary liability.
The suspense is killing me. The proposed regs are one thing, the final could be another. Are those of us in the mutual fund industry ready?
Study backed by AARP hopefully will influence this decision as its currently in both the house and senate.
I wouldn't hold my breath on the 403b regulations. The latest that we have heard is that they may not be final until September (and I wouldn't be surprised if the effective date isn't until January 1, 2009).
Due to the spike in bond yields, most Stable Value funds have a market value that is less than book value, or a loss to the company. If they must move a sizeable amount of assets into the new default and out of Stable Value, there will be a financial challenge to many companies.
We are custodian for quite a few 403(b)(7)s, so the investment portion of the new regs have caused some anxiety. (Probably not as much as those employers who for years have gotten away with very few headaches when it comes to employee retirement plans!)
We currently have a large portion of our plan assets in Guaranteed Insurance Contracts. We use this as our plan default. I do not feel comfortable with using riskier options as a default.