Plan sponsors shouldn’t let these three common fee foibles expose them to unnecessary fiduciary liability.
It will be important for 401k plan sponsors to get down and dirty when it comes to understanding the fiduciary liability implications of “clean” shares and their equivalent. Furthermore, since the most successful class action suits have involved different share classes of the same fund, you can be sure the introduction of “clean” shares will catch the eyes of your not-so-friendly neighborhood class action attorney.
“Benchmarking your plan’s fees is important step to carrying out your fiduciary responsibilities.”
How much effort does it really take for ongoing monitoring of an index fund or a target date fund? And does that justify the fees advisers typically charge? And is this why the DOL inserted that reference in Q5 of the Fiduciary FAQ?
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?
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.
Fee Disclosure and class-action suits have been the one-two punch that has spurred interest in greater 401k fee scrutiny.
They say less is more, and nowhere is that more true than in 401k participant fee disclosure.
If fee disclosure is a disease, education is the cure.
Who needs fee disclosure when you have Jerry Schlichter?
