The IRS recently announced that employees will be able to contribute $17,000 to defined contribution plans for 2012, a $500 increase over the previous amount. And this week, the DOL announced a new regulation regarding investment advice that frees plan sponsors to be able to provide resources for quality investment advice with certain parameters. Plans may offer third-party investment advice through:
– Certified computer models for investment option comparisons
– Investment advisors who are paid a level fee not dependent on the choice of investment
Plan sponsors will have the opportunity to select the investment advisor, but aren’t responsible or liable for the investment advice. If you use either of the investment advice options, you must disclose the advisor’s fee amount to participants and must submit to an annual audit.
While related to fiduciary responsibility, the latest rule adjustments for retirement plans are not the same as the anticipated new definition of fiduciary. The new definition is expected in early 2012.
For more information, see the DOL’s announcement.