Mainspring Partner

Fall 2010

Focus On Target Date Funds: Comments On SEC’s Proposed Changes

On June 16, 2010, the U.S. Securities and Exchange Commission (SEC) unanimously approved proposed rule amendments to enhance the information provided to target-date fund (TDF) investors.

The SEC proposals seek to clarify the "set it and forget it" marketing approach for target-date funds seen in the past. The rule changes proposed by the SEC are designed to help clarify the meaning of the date in a target-date fund. They would enable investors to better assess the anticipated investment glide path and risk profile of a target-date fund by, for example, requiring graphic depictions of asset allocations in fund advertisements. The rules also would require an asset allocation "tag line" adjacent to a target-date fund’s name in an advertisement.

As of early October, the SEC had not issued the final rule amendments. The 60-day comment period included comments submitted through September 7, 2010.

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With Our Compliments: Register For ASPPA's Webcast On TDFs And Advisor Update Newsletter

The Standard is proud to sponsor complimentary Advisor Webcasts and the Advisor Update bi-monthly newsletter published by the American Society of Pension Professionals & Actuaries (ASPPA) and The 401(k) SUMMIT. The latest free webcast, "Target Date Funds: Growth, Concerns and Changes," presented by Mike Malone and Fred Reish, offers advisors a legal perspective and practical applications on how to leverage these changes to make your next sale.

If you missed the live event September 15, 2010, you can still register for the recording of this complimentary Advisor Webcast and listen at your convenience.

You can also register to receive ASPPA's Advisor Update. Sign up to receive valuable industry information at no cost.

Industry Conference Updates: The Standard Presents Marketing And Communication Strategies

The Standard was an exhibitor at two recent national industry conferences and was also represented on communications and marketing panels.

• 2010 PLANADVISER National Conference, Orlando, Sept 20-22, 2010. In the "Breaking it Down" session, panelists discussed how to connect with varied participant groups through targeted plan demographics. Sheri Fitts, Director of Communications and Large Plan Sales, The Standard, served as a panelist.
• The Center For Due Diligence 2010 Advisor Conference, Chicago, October 6-8, 2010. Sheri moderated a panel titled "The Intersection of Inbound Marketing, New Media, Sales & Compliance," that discussed how new media such as social networking and blogging offer low-cost opportunities for advisors to gain recognition, drive website traffic and generate sales.

To hear some of the insights presented, download an interview with Sheri, hosted by Tony DeMaio, Chairman & CEO, Big Media Broadcasting Company. For more marketing ideas and strategies, check out The Standard's Building Your Business webinar series, as well as our past presentations.

New Online Service Coming Soon

As a leading provider of employee benefits and retirement services, The Standard believes in empowering people to take control of their financial futures. To demonstrate our commitment, we’re bringing a new online service to customers later this fall called Adaptu that will make it easier for them to be actively involved in the financial decisions affecting their lives. Adaptu creates a comprehensive financial picture for people, helping them weigh the effects of life decisions on their overall financial well-being. To be one of the first to know when this free service has launched, visit the Coming Soon page www.adaptu.com.

ERISA 408(b)(2) Highlights, Impacts On RIAs And Next Steps

Unless you’re new to the industry, you’re aware that on Friday, July 16, 2010, the Department of Labor (DOL) published the long-awaited interim final regulation concerning ERISA 408(b)(2). This guidance is needed because ERISA 406(a)(1)(C) prohibits the furnishing of services between a plan and a party-in-interest. Section 4975 of the Internal Revenue Code has a similar prohibition; however, ERISA 408(b)(2) creates an "exemption" where:

• the contract or arrangement is "reasonable,"
• the services are necessary for the plan,
• and no more than reasonable compensation is paid.

The new regulation goes into detail about the definition of "reasonable service provider arrangements," who and what types of compensation are covered and the terms and disclosures required to avoid prohibited transactions. The effective date is July 16, 2011, for both new and existing arrangements.

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