NSCP Currents

Should You Have a Formal ERISA Compliance Program?

A broad range of financial services providers are impacted by the fiduciary and prohibited transaction provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”) and the prohibited transaction provisions of the Internal Revenue Code of 1986 (the “Code”). Such providers include those who provide both fiduciary and non-fiduciary services to a plan or other entity subject to ERISA as well as those who provide such services to individual retirement accounts (“IRAs”). Yet, while many of these same providers have extensive written procedures assure compliance with the myriad of state and federal securities laws and regulations that apply to them, very few have detailed written procedures on compliance with ERISA and the Code. The purpose of this article is to advise readers on some of the key ERISA and Code provisions to which advisers, brokers and other providers may be subject to by providing services ERISA-governed plans (“Plans”) and IRAs and to provide framework for the establishment of an ERISA and Code compliance program and manual, which include such procedures.

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