Thereâs a fear that those rushing to promote their own PEPs are merely trying to return to the bundle service provider environment the industry evolved away from more than a decade ago. This makes due diligence all the more important.
Tag "fiduciary"
Just as these changes come bearing down, so, too, does a need for greater hand holding. Pressures within the provider industry, however, appear to be reducing the number of available hands.
Thereâs not a sin in listening to radio shows sponsored by those selling gold and silver. Itâs quite another thing to actually act on their ârecommendation.â
Should the platform offer ESG doesnât necessarily mean good news for the 401k plan sponsor. Including ESG funds might introduce other risks.
Normally, interest rates rise with inflation. In turn, bond rates rise with interest rates. But that hasnât happened. In fact, short rates remain at historic lows. This means folks sitting in money markets or âsafeâ government bonds (and bond funds) are seeing their retirement savings eroded away.
If youâre a fiduciary of the acquiring plan, you want to make sure youâre not burdened with any unknown liabilities. If youâre a fiduciary of the acquired plan, you want to make sure the merger process doesnât introduce new liabilities.
What would it take to realize the fiduciary liability of overtly using ârisk toleranceâ metrics? And what can 401k plan sponsors do about it?
The conflicts-of-interest inherent in selecting proprietary funds are apparent. Less so are the criteria used to determine what a suitable process might be.
But that idea contained a flaw. In the early years, limited choices made it easy for employees. The proliferation of the number of options in later years, however, exposed the lack of sophistication within the employee cohort. That can lead to bad decision-making. Alternative solutions were needed.
The Biggest 401k Fiduciary Fireworks, Fizzles, And Flops In 2021
Flops may not be forever. They may just be good ideas before their time. If youâre going to belittle them, you best hurry, because, if you wait too long, you may just discover they arenât flops anymore. As a result, letâs not waste any time before the shelf-life of these flops expire.