Fee disclosures will become the trending topic among 401k plan sponsors and fiduciaries. It will be tempting to overweight this parameter. But if your plan has an index fund or you’ve ever contemplated using index funds, this book contains one piece of data you absolutely must have.
If the DOL requires the 401k plan fiduciary to ignore a fund’s investment performance, but the SEC still requires funds to disclose that performance, which will 401k investors choose? More importantly, who’s left holding the liability bag?
Should indirect fees matter? Academics may argue, but regulators will have the final say. Unfortunately, different definitions of fees only confound the ERISA fiduciary.
Too many accept the definition of “fees” without deliberation. Yet, even by looking solely at the fees associated with investment choice, the fiduciary can land in a state of confusion. This only increases liability. How can we fix this?
Most interesting, though, may loom the warning of Justice Alito: When is comes to fiduciary duty, disclosure isn’t enough. One wonders if the DOL is listening.
$16.5 million is a large price to pay for disclosure and due diligence a plan fiduciary can simply and consistently address. This may be the easiest action a 401k plan fiduciary to take to prevent the camel from sticking his nose under the tent.
Why wait until now to bring up the three-month old blog? The bigger question, however, remains, “How should a 401k fiduciary analyze mutual fund fees?”
A typical 401k plan fiduciary has no doubt read about this new product. Fiduciary News goes deeper to reveal answers to some of the more critical questions the astute fiduciary might have about BrightScope’s Personal Fee Report.
The DOL admits, due to the number of variables involved, there’s no easy way to calculate the fees and expenses paid by your 401(k) plan. You might be surprised who the DOL suggests trying to find the answers to the following ten questions from.
Mutual fund shareholders can’t have their cake and eat it, too. Indeed, a myth busting professor bluntly states “mandatory fee reductions are likely to injure fund shareholders.”
