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Precious Metals IRA


The DOL's Attack On Retirement Plans Kick's Into High Gear!

The DOL’s Attack On Retirement Plans Kick’s Into High Gear!
A recent report appearing in “AdvisorOne” mentioned the Department of Labor’s Employee Benefits Security Administration (EBSA) went after retirement plans last year in a BIG way. Almost $1.4 BILLION in fines was issued in over 3,000 civil cases. The attack by DOL resulted in over 300 criminal cases. This resulted in more than 120 indictments of which 75 cases ended in convictions or guilty pleas.
More than 3,000 plans were audited in 2010, which resulted in over 70% of them being required to restore losses or take other corrective measures.
These figures don’t even take into consideration the economic cost to the companies and individuals who doubtless spent a tremendous amount of money on legal fees defending themselves. And if you think this was a one-time occurrence think again. The DOL is planning on ramping up their enforcement staff for this year.
The majority of these cases resulted from what the EBSA is calling Fiduciary

negligence and non-compliance with fiduciary responsibilities. Guess what, it is going to get worse and I mean a lot worse. I have been writing about new rules designed to broaden fiduciary responsibilities and to bring many financial advisors and brokers under the same umbrella. Wall Street has fought for years to prevent brokers and advisors from being labeled fiduciaries but now the battle

is over.

The DOL is set to reissue its new definition of fiduciary and fiduciary responsibilities in April. One of the more controversial aspects of the first round of proposed changes was to bring IRA’s under the same umbrella. That means brokers and other advisors will fall under the same rules that resulted in so many fines and criminal cases for the pension plan world. There are a heck of a lot of IRA’s giving the DOL a much bigger playing field. In the meantime they are working on a blanket exemption to the prohibited transactions rule that would

give IRA Advisors some relief but only if they dumb down their advice and carefully meet certain disclosure rules.

There is another arm to this attack and that is the new disclosure rules that kick in. Please refer to my previous articles for background information on this topic. Here it is in a nutshell. For years participants in company sponsored retirement plans have been getting ripped off and they have no idea! There have been hidden fees, kickbacks, revenue sharing and all kinds of sweetheart deals going

on in retirement plans with complete impunity. The fact of the matter is many plans sponsors and trustees really have no idea just how much their plan is costing them and their participants. That is all about to change with the new fee disclosure rules that kick in this year. [408(b)(2)].
I think fee disclosures and transparency are a great thing and I have been calling for it for years, but I can also see this leading to a lot more lawsuits and significant fines for the retirement plan world.
It doesn’t take a rocket scientist to see what these two attacks will lead to.
More attacks on retirement plans!
More criminal cases!
More fines collected by the DOL!
Brokers, and other advisors facing the threat of fines and indictments!
This will undoubtedly lead to some advisors leaving the market and no longer servicing IRA’s or retirement plans.
Some companies will no longer handle IRA’s or pension plans preferring not to

act as custodians.

Those that do will significantly limit YOUR investment choices.

Sovereign International Pension Services, SIPS, offers consulting services to qualified plans and acts as an IRA Administrator for IRA’s, SEP’s and the remainder of non-qualified retirement plans.

Now more than ever you need an independent review of your retirement plan. Our company can review your plan document, do an independent review of your fees, asses the advice you are getting from your advisor, review your fiduciary responsibilities and much more.

IRA’s account holders with non-traditional assets are required to submit their FMV, Fair Market Value on an annual basis. Custodians require an outside verification of the your FMV, which SIPS can provide. If you own non-traditional assets or want a more realistic valuation of your account value we can help.


Protect yourself and your retirement plan assets now before you become a statistic. As always feel free to contact our office for additional information.

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