It’s too easy for plan sponsors to get lost in the weeds when dealing with plan minutia. Yes, “the buck stops here” reality can overwhelm many. Delegation is the key. It’s also the Achilles Heel. This is where the magic word emerges.
Tag "DOL"
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?
Here’s where the greatest controversy of the new Rule, as with its predecessors, comes to a head.
Herein lies the potential for a direct conflict of interest. This applies generally to all proxy voting in commingled portfolios.
Plan sponsors need to think about it in these terms: Does it make sense to have a pork-belly ETF on a 401k investment menu? How about orange futures?
Between the IRA Rollover matter and the redefinition of “regular services,” there is no shortage of ways to chip away at the new Rule. What might be one way we can expect to see the industry attack the Rule in front of a judge?
This broader definition of fiduciary may impose a potential hardship on a segment of the retirement industry that has been trying hard to gain a foothold in plan infrastructure.
The DOL seems to use the same metric that it earlier employed in its statement on the Fiduciary Rule. Still, the Advisory Opinion is very precise in what it allows. Citi will have to tread carefully to not cross the line into the realm of fiduciary.
The DOL’s guidance on missing plan participants appears just as effective as its week 2012 Mutual Fund Fee Disclosure Rule. Yes, it’s there, but it has no viability. Still, that doesn’t mean 401k plan sponsors can ignore the issue, even if they have not lost participants.
These Classic Movies (Unknowingly?) Promote The Fiduciary Standard
It seems like each decade produces a major box office hit that exudes fiduciary. This whole “best interest” thing seems to have caught on in Tinseltown. More recent movies have added a good dose of the “honesty” part of fiduciary.