Is the DOL’s Defunct Rule a Fiduciary Obi-Wan: More Powerful Dead Than Alive?
Compliance
We want to focus on the type of “nevers” that, in the heat of the moment or humdrum routine of everyday life, fiduciaries can find themselves slowly sliding down that slippery slope towards. In fact, if, as you read these, you catch yourself muttering something about “there’s always an exception,” then you’ve just discovered where that slippery slope lies.
These may not be the only rules, but they rank up there as among the most practical for fiduciaries and, in some cases, for any other professional.
While the fiduciary should be fairly compensated, the fiduciary is prohibited from engaging in activities that might increase that compensation to the detriment of the interests of the beneficiary. Such activities represent the definition of a self-dealing transactions. Here are some examples of self-dealing transactions that, if executed, will likely result in a fiduciary breach.
Here’s the beginning of an operational definition of what it takes to be a good fiduciary (first of three installments).
On the face of it, there appears to be little room for debate. Upon closer examination, however, the specifics of particular circumstances can muddle things up. Would you like to see what we mean by this? Here’s what you get when you ask the experts whether or not a fiduciary can ever legally engage in self-dealing.
Are LPOAs enough to end the confusion? Maybe not. But they do provide the legal basis for which one can substantiate the reality of a fiduciary relationship.
For all the talk and concern about Congress cutting the contribution caps for 401k plan, the real news appears to be just the opposite. Sometimes, it’s better to wait for the final result rather than get worked up about what you think may happen.
Congress may be zagging when common sense says it should be zigging. Or maybe not.
While much has been written of the lack of retirement savings among Americans, the most widely talked about change – lowering the cap on tax deductions – could exasperate the lack of retirement savings.
