This dilemma isn’t new. Trust officers have had to face it for generations. It’s called a “split-interest” trust. Multiply this split interest problem by the number of beneficiaries in a typical retirement plan and you can see how this conflict grows more complex.
Compliance
By far, there’s almost universal agreement that 401k fiduciaries should be less concerned about investment performance than you might have seen a generation ago. Why is this so?
Not only do you need to watch the place that holds all the money, you need to watch the pipeline that feeds the money there.
Let’s not just blame certification providers. Government agencies responsible for monitoring and enforcement are also responsible for market confusion and the dilution of the “fiduciary” standard.
Documentation, due diligence, and other formal compliance matters are critical to reducing the fiduciary liability of 401k plan sponsors. But ultimately, they are responsible for safeguarding the assets of plan participants.
We asked retirement advisors from across the country whether they felt SECURE 2.0 had been over-hyped or represented a game changer. Here’s what they said on a few key issues.
Here are five regulatory worries for those on the front lines: the professionals who devote their careers to helping improve the retirement prospects of others.
Should the platform offer ESG doesn’t necessarily mean good news for the 401k plan sponsor. Including ESG funds might introduce other risks.
If you’re a fiduciary of the acquiring plan, you want to make sure you’re not burdened with any unknown liabilities. If you’re a fiduciary of the acquired plan, you want to make sure the merger process doesn’t introduce new liabilities.
If you think the web of fiduciary duties is complex in a 401k plan that focuses on getting employees to save for retirement, imagine how much more intricate it becomes if the plan also has to cater to retired employees.
