Once the communications link is broken, it’s fair to say the participant is lost or missing. Plan sponsors need a second set of procedures in this case.
Basic Members
“Industry participants also argue that the rule transforms one-off transactions into fiduciary relationships in violation of the common law, but the common law of the states is divided on this, and there is a need for a federal standard regulating investment advice fiduciaries.”
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Plan sponsors ought naturally to know how the plan addresses the needs of their business, but do they really know how to tweak the plan to improve outcomes?
This isn’t a compliance audit, it’s an operating efficiency audit. That covers plenty of ground, from technology to benchmarking the value offered by the service provider.
Oddly, it’s usually the opposite for mutual funds. Actively managed (higher operating cost) funds tend to perform better during market downturns. Passive (lower operating cost) funds, on the other hand, generally perform better during growth markets.
If plan sponsors are working with the appropriate plan fiduciary, then an ongoing review of the fund’s performance, fees, and underlying risk should be part of their ongoing process
For all the good intentions, however, what will happen when the rubber finally meets the road? Will the new DOL Fiduciary Rule really level the playing field?
“This lack of active involvement could lead to inefficiencies, reduced liquidity, and potential market instability, as prices may not accurately reflect the underlying value of securities.”
For all the rose-colored eyes that have a created a legend flawless certitude concerning memories of a time that never existed, pension plans simply can’t measure up to 401k plans.
