These service providers bring in expertise and can engage the worker directly. Once set in place, the plan sponsor can step aside and let the system run on its own.
Tag "fiduciary"
I donât think the plan service providers should provide participant advice. Advice to participants should be provided by a non-related third-party fiduciary.
The DOLâs guidance on missing plan participants appears just as effective as its week 2012 Mutual Fund Fee Disclosure Rule. Yes, itâs there, but it has no viability. Still, that doesnât mean 401k plan sponsors can ignore the issue, even if they have not lost participants.
The antiseptic compliance regime spelled out by the DOL and ERISA has to date defined fiduciary services. Perhaps, if weâre going to consider what is âbeyondâ that sterile definition, we might want to go back to the future. In a sense, rediscovering where âfiduciaryâ initially came from might suggest where it is headed.
Back then, at least, we knew who wore the white hats and who whore the black hats. Today, thanks to muddled and often conflicting regulations for multiple agencies, everyone is wearing fifty shades of gray.
This week is all about those wayward 401k features that are well beyond their expiration date. Careful, though. In the process, youâll see whatâs garbage to one is a work of art to another.
This week weâll be focusing on those favorite features as judged by the retirement plan professionals we interviewed. Donât be surprised if over the next few weeks you discover that one providerâs treasure is another providerâs trash.
The root of these broader fiduciary concerns lies within the domain of compliance. Everything derives from what the regulators require, what any DOL audit might look at, and what might pique the interest of class-action attorneys.
You cannot understate the fiduciary aspect of lower fees. Most 401k plan sponsors, and especially those in smaller plans, donât have the time or expertise to administer their companyâs retirement plan. If they skimp on fees, are they also skimping on the fiduciary protection those professionals are supposed to provide?