Structuring Best Interest Contract Exemptions to Comply With the DOL Fiduciary Rule

Drafting BICE Agreements to Protect Preexisting Commission Practices for Non-Discretionary Advice in Retirement Plans

A live 90-minute CLE webinar with interactive Q&A


Tuesday, February 21, 2017
1:00pm-2:30pm EST, 10:00am-11:30am PST

Early Registration Discount Deadline, Friday, January 27, 2017


This CLE webinar will provide ERISA counsel and advisers with a comprehensive and practical guide to applying the BICE to allow plan sponsors and broker-dealers to continue to be compensated on a commissioned basis or using other compensation structures while complying with ERISA’s and the Code’s prohibited transaction provisions applicable to retirement plans and other tax-preferred accounts. The panel will provide an in-depth discussion of BICE compliance and offer specific guidance on how to comply.

Description

The 2017 fiduciary rules have created a great deal of concern and uncertainty among ERISA counsel, plan fiduciaries, financial advisers, insurance companies, broker-dealers and other firms. The new rules impose significant restrictions on how advisers may provide investment advice in connection with a range of tax-preferred investment vehicles including ERISA-covered plans, IRAs, HSAs, Archer MSAs, and Coverdell ESAs.

To address conflicts of interest that arise when providing investment advice in connection such accounts, the DOL has included a best interest contract exemption (BICE) provision in the fiduciary rules. If an adviser complies with BICE (including entry into a BICE contract when applicable), the BICE provides relief from ERISA’s and the Code’s prohibited transaction povisions.

Structuring a BICE is a complex task. Counsel must identify how the exemption may be applied based on the type of account and the compensation scheme involved and ensure that the contract language explicitly meets the DOL’s requirements for allowing the exemption. The BICE also mandates significant contract, notice and disclosure practices, both one-time and ongoing, to the DOL and the interested parties to the contract.

Listen as our authoritative panel of benefits counsel provides a thorough and practical guide to structuring BICE agreements, offering usable structuring tools and drafting language to properly construct a BICE agreement that will withstand DOL scrutiny.

Outline

  1. Types of BICE
  2. What compensation practices will a properly structured BICE permit
  3. Discretionary vs. non-discretionary advice
  4. Structuring BICE terms for full exemption
  5. Notice requirements

Benefits

The panel will review these and other key issues:

  • What is the scope of a BICE?
  • What terms must be included in a BICE contract between firms and owners of IRAs and other non-ERISA accounts?
  • Drafting disclosure applicable to ERISA plans versus IRAs and other accounts.
  • What other requirements must be met for advisers to comply with the BICE?
  • What is the notice requirement a firm must provide to the DOL in order to rely upon the BICE?

Faculty

David C. Kaleda, Principal
Groom Law Group, Washington, D.C.

Mr. Kaleda's broad range of experience includes handling fiduciary matters impacting plan sponsors, investment and other fiduciary committees, investment managers/advisors, recordkeepers, broker-dealers, banks and other financial services firms. He advises clients on the avoidance and resolution of prohibited transaction issues, the structuring of alternative investment funds, and day-to-day compliance issues arising under ERISA and the Internal Revenue Code. He also counsels clients on compliance with the Department of Labor’s final “investment advice” regulation and related exemptions. 

Peter M. Varney, Counsel
Seyfarth Shaw, Atlanta

Mr. Varney advises plan sponsors on the design and operation of employee benefit plans, including 401(k) plans, flexible benefit plans, nonqualified deferred compensation plans, and severance plans. He creates and drafts retirement, savings, and welfare plan documents, summary plan descriptions, plan participant communications, and plan administrative forms to ensure compliance with the Internal Revenue Code and ERISA. His practice regularly involves counseling clients on the Patient Protection and Affordable Care Act (Health Care Reform), HIPAA privacy and security rules, wellness programs, self-funded medical plans, and COBRA administration.

Donald D. McBride, Officer
Greensfelder Hemker & Gale, St. Louis

Mr. McBride's practice primarily focuses on representing broker-dealers, clearing firms, registered investment advisors and individual investment professionals. He has extensive experience in litigation matters including business torts and FINRA arbitration, including defending claims alleging state and federal securities law violations, unsuitability, fraud, churning and overconcentration. He also represents members of the securities industry in connection with investigations by the SEC, FINRA, and state regulators. He also counsels clients on aspects of their business operations, including advising clients on the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, the USA Patriot Act, the Gramm-Leach-Bliley Act, state securities laws and FINRA rules.


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