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As 2017 approaches, retirement plan sponsors need to be prepared for the Department of Labor's recently modified rules that affect ERISA retirement plans (as well as individual retirement accounts and even some health savings accounts). Under previously implemented rules, some investment advisors of retirement plans (those that were generally compensated via commissions and mutual fund management fees) were not held to a fiduciary standard - requiring only that their advice be "suitable" to their clients. Under the new rule, which becomes effective April 10, 2017, most investment advisors to plans (regardless of the manner in which they are compensated) will be considered fiduciaries. Under this more stringent standard, advisors are required to put clients' interests first and "act with the care, skill, prudence, and diligence that a prudent person would exercise based on current circumstances." As a plan sponsor, you should request a copy of a fiduciary agreement in writing; many advisors are already complying with the new rule and can provide the agreement today. With this rule in place, it is hoped that costs will be restrained while the competency and trust in plan advisors go up.

For more information or questions on this topic, please contact your local UHY LLP  professional, or visit us on the web at www.uhy-us.com.

By Nichole Haviaras, CPA