Fiduciary News
Happy New Year!!
Thankfully the end of 2008 brings us renewed hope that with a new year comes a fresh start and the chance for better times.
It is our hope that you were able to enjoy your holiday festivities and able to reconnect with what is important in your life.
Additionally, we hope that you had the good fortune to make progress on your planning for 2009 and that you’re ready to kick off this year with a bang!
To begin this New Year, we thought we would share information we think is particularly relevant this time of year. The first article is regarding new legislation on pension and RMD relief. Then we have provided a "fact sheet" from the U.S. Department of Labor on Proposed Regulation Relating to Service Provider Disclosures Under ERISA Section 408(b)(2). Finally, in light of recent scandals involving money and hedge fund managers bilking their clients, we wanted to share an overview from the Wall Street Journal on how to avoid finding yourself or the money you manage in a Ponzi-style scheme.
Also, keep in mind that we are continuously uploading new and informative articles to our website www.CCAWealth.com, and encourage you to take a moment and check them out.
On an administrative note, we’ll be changing the delivery schedule of this e-Newsletter to a Quarterly piece. We hope that this e-Newsletter continues to provide you with timely, helpful information as you perform your fiduciary role.
As always, we will do our part to make sure we are passing along pertinent news and information.
Again, we’d like to wish you and your family a very Happy New Year. May the year be prosperous for us all.
See you next month,
Carpenter Claydon Advisors, Inc.
Latest News
Bush Signs RMD, Pension Relief into Law
An Associated Press news report quoted Bush spokesman Tony Fratto as saying that the White House had concerns with the Worker, Retiree and Employer Recovery Act (H.R. 7327), including that it might cause workers to actually lose benefits in the long term. However, Fratto told reporters, officials decided the bill's benefits outweighed its potential drawbacks given "this current economic environment" and Bush included it in a handful of bills (see here) approved Tuesday.
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Proposed Regulation Relating to Service Provider Disclosures Under ERISA
In recent years, changes in the way services are provided to plans have resulted in complexities that make it difficult for plan fiduciaries to understand how service providers are compensated and whether they have possible conflicts of interest that may affect their performance.
Under ERISA, plan fiduciaries are obligated to act prudently in selecting service providers and ensure that no more than reasonable compensation is paid for services provided to plans, taking into account the direct and indirect compensation received by the service provider.
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CCa Responsibility
CCa has always refrained from investment products and management on which it could not adequately complete due diligence. A recent example of such an investment includes earlier this year a successful real estate management company that approached CCa and proposed CCa principals invest in its latest project and that CCa recommend to it to CCa clients. We said no given the lack of knowledge and comfort with the management company's joint venture partner. Now the real estate management company is suing the same joint venture partner for misappropriation of funds.
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Fiduciary Fast Facts
Managing Your Fiduciary Responsibility
What is the ERISA?
Who is an ERISA fiduciary?
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Fiduciary Duty Means Following Prudent Investment Practices
The term "fiduciary" is inclusive of people who have the legal responsibility for managing someone else's money; this includes investment committees of retirement plans, trustees of private trusts and investment advisors. In general, a fiduciary must act for the benefit of the individual to whom they owe fiduciary duties, to the exclusion of any contrary interest. Among the legal duties commonly imposed on fiduciaries are duties of good faith and candor (a duty to disclose on a voluntary basis all material information).
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