DC BRIEFS:EBSA slates public hearings on fee-disclosure plan

WASHINGTON — The Employee Benefits Security Administration will hold a public hearing March 20-21 in Washington on the agency's proposal to enhance the amount of information that employers receive about the fees of ERISA plan service providers.

The EBSA's controversial proposal would require service providers to give employers detailed written disclosures about conflicts of interest and plan compensation arrangements. Hearings on the proposal were requested in a Feb. 12 comment letter filed by the Securities Industry and Financial Markets Association, which represents broker-dealers.

“As is clear from all the comments filed with respect to this regulation, it proposes sweeping and significant changes which have confused and disturbed the plan community,” said a letter signed by Elizabeth Varley, SIFMA managing director, government affairs.

TALLAHASSEE, Fla. — A coalition of Florida education associations introduced a model plan for 403(b) plans in the state that it claims would give participants 33% more in retirement assets over a 30-year career than with existing plans.

The group, Independent Benefits Council, recommended five companies as “best in class” providers: AIG Retirement, AXA Equitable Life Insurance, PlanMember Financial, American Century and Waddell & Reed, which all agreed to follow specific stipulations to keep fees low and meet IRS regulations. School boards can add one or more companies to the authorized list, but every effort would be made to require those companies to agree to the same stipulations as the five recommended companies.

The IBC, made up of the Florida Education Association, the Florida Association of School Administrators, the Florida School Boards Association and the Florida Association of District School Superintendents, worked with consultants Gallagher Benefit Services and TSA Consulting Group to develop the model plan and recommended the five providers. The council formulated the plan because IRS regulations taking effect on Jan. 1 require employers to take more responsibility for 403(b) plans. Also, the council wanted to find a way to reduce fees. The group recommends that all 67 Florida school districts adopt the plan.

“There's a lot of substance in this plan,” IBC spokesman Tom Herndon, former executive director of the $187.5 billion Florida State Board of Administration, Tallahassee, said during a teleconference announcing the plan. “It ought to be held out as a model for school districts across the country.” FSBA spokesman Michael McCauley did not return a call seeking comment.

CHARLESTON, W. Va. — The West Virginia House approved legislation Feb. 21 that would clear the way for about 19,000 participants in the state's Teachers' Defined Contribution System to move their assets to the West Virginia Teachers' Retirement System.

The legislation would provide $78 million from the state to help subsidize the transfer to the DB plan. It also would require at least 75% of the DC participants to approve the transfer.

Anne Werum Lambert, executive director of the state's Consolidated Public Retirement Board, Charleston, said Gov. Joe Manchin and state legislators have been working on a way to encourage migration to the DB plan since the state Supreme Court in January blocked a long-pending effort to merge the plans. Ms. Lambert said the move was being encouraged because many DC participants don't have enough in their accounts for retirement.

The $908 million Teachers' Defined Contribution Plan, which has been closed to new employees since July 1, 2005, and the $3.6 billion Teachers' Retirement Plan, both Charleston, were originally scheduled to merge July 1, 2006.

OMAHA, Neb. — Mutual of Omaha agreed to acquire Retirement Marketing Services, a third-party administrator for 401(k), 403(b) and 457 plans, said Jim Nolan, spokesman for Mutual of Omaha. The transaction is expected to be completed within 30 days; further terms were not disclosed. RMS will be rebranded as Retirement Marketing Solutions, said Mr. Nolan, adding that Mutual of Omaha has offered jobs to all RMS employees.