It goes without saying there are risks when one plays politics with other peoples’ money. The depths of the ensuing fiduciary liability will only be tested when the tort bar brings the matter to court. Until then, fiduciaries may wish to proceed with caution.
Conflicts of Interest
“Benchmarking your plan’s fees is important step to carrying out your fiduciary responsibilities.”
The DOL’s new Rule both discourages and permits continued conflicts-of-interest.
Absent any objective definition of ‘excessive’ and ‘reasonable,’ does the Conflict-of-Interest Rule have any real meaning, or is it merely another potentially lucrative cash-flow stream for class action attorneys courtesy of your friendly neighborhood government regulator?
Without conflict-of-interest fees like 12b-1 fees and revenue sharing, the world becomes a lot simpler for 401k plan sponsors and a lot safer for plan participants.
Simply by eliminating all funds with commissions, 12b-1 fees, and revenue sharing from the 401k investment due diligence process can greatly reduce the fiduciary liability exposure to the plan sponsor.