Compliance October 26, 2011

DoL Publishes Final Rule on Reports Filed by Union Officials

October 26, 2011 (PLANSPONSOR.com) – The U.S. Department of Labor’s Office of Labor-Management Standards (OLMS) published a final rule revising Form LM-30.  
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The new rule promotes transparency by requiring union officials to disclose payments and interests that involve actual or likely conflicts between the official’s personal financial interests and his or her duties to the union. The department intends to engage in compliance assistance and enforcement efforts to ensure proper reporting by union officials.

The DoL said the new rule avoids unnecessary intrusions into labor-management relations by removing requirements to report transactions that create no actual or likely conflicts of interest. The rule announced today reverses one published in 2007 (see DoL Puts Out Final LM-30 Union Reporting Rule) that expanded the length and complexity of the LM-30, but did not lead to additional useful information being reported by union officials.

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The new rule becomes effective on November 25, 2011, and applies to reports required by union officials with fiscal years beginning on or after January 1, 2012. For fiscal years beginning before that date, OLMS will accept this new form, the 2007 Form LM-30, or the original, pre-2007 Form LM-30. A copy of the revised Form LM-30 is available at http://www.dol.gov/olms/regs/compliance/GPEA_Forms/blanklmforms.htm#FLM30.

The final rule can be viewed at http://s.dol.gov/JD. 

Administration October 26, 2011

Plan Sponsors Predict Demand for SRI Will Increase

October 26, 2011 (PLANSPONSOR.com) - In a recent joint study, the US SIF foundation and Mercer found that the number of defined contribution plans in the U.S. offering a sustainable and responsible investing (SRI) choice could double in the next two to three years.
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The study,Opportunities for Sustainable and Responsible Investing in US Defined Contribution Plans, points out that 14% of the DC plan sponsors responding to the survey already offer one or more SRI options, while an additional 13% of survey respondents either are discussing adding an SRI option or intend to do so in the next two to three years. More than four out of five plan sponsor respondents (84%) — both those that currently offer SRI options and those that do not — predict that demand for SRI options in retirement plans will increase or remain steady over the next five years. 

According to a news release, for those plan sponsors that currently offer SRI options, the primary reasons for doing so are to align their plans with their organizational missions and to meet employee demand. However, more than 70% of the plan sponsor respondents that do not offer such options say they believe that SRI options have never been requested by participants. (The survey did not ask plan sponsors whether they had a formal way to elicit or track participants’ potential interest in SRI or other options.)  

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A small subset of respondents say they do not offer SRI options but have received participant requests for them. These plan sponsors say the primary reason they have not added SRI options—cited by just under one-quarter of the subset—was that the requests from participants have not reached a sufficient level. Somewhat lesser concerns—cited by under one-fifth of this group—were questions about fiduciary duty and financial performance.  

Whether a plan sponsor offers SRI options bears little correlation to the plan’s size, either by value of assets or number of participants. Rather, it appears that SRI options are most likely to exist where the philosophy is aligned with an organization’s objectives and culture. SRI options are more likely to be found in the plans of non-profit, mission-based or public organizations than in corporations. 

The news release said nearly three in five respondents (58%) say they have minimal or no understanding of SRI investment products and indices.    

The survey report can be found at http://www.ussif.org/resources/pubs/.

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