2009 exposed a much deeper problem with Target Date Funds. Pitched as the be-all-and-end-all to 401k investors, these funds fell flat on their collective face as 2008’s down market exposed them as more sizzle than steak. Washington might help, but a knee-jerk reaction to 2008 is not a good solution at all.
Tag "DOL"
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.
Worried while Washington fiddles? These three vital questions might just help you determine if today’s DOL ruling will increase your personal fiduciary liability.
Plan sponsors want a more robust way to analyze. This technique may have saved 401k investors significantly last year.
Contrary to popular press reports, economic theory clearly suggests paying high fees is justified. Here’s the cruel irony and the greatest danger posed by the myth of high mutual fund fees: by taking back some of the responsibility normally delegated to professional advisers, an active fiduciary may in reality take on a greater fiduciary liability.
A written Investment Policy Statement can act as the cornerstone to regulatory and legal compliance. With this written IPS, the fiduciary has documented the justification of the appropriateness of the institution’s mission and investment objectives. From this, the fiduciary can better evaluate and monitor the institutional fund’s investment performance. Finally, the written IPS may act as a safeguard to reduce fiduciary liability.
We don’t need more regulation to prevent future Madoffs, we just need common sense (and, perhaps, a tad bit more enforcement of existing regulations). Here are five straightforward rules fiduciaries can follow to avoid their own personal investment Waterloo.
One of the biggest liability risks facing the ERISA/401k plan fiduciary derive from the inability to properly disclose and educate plan participants. The primary reason for this gap may be due to lack of specifics from the DOL regarding plan document contents and distribution of key information to participants. The suggestions offered by the ICI should help remedy this gap.
Does creating an Investment Policy Statement (IPS) reduce fiduciary liability or augment it? Though there’s no clear agreement on this matter, the DOL has long maintained it has greater concern for processes than outcomes. Benefits attorneys often view memorializing the process through an IPS and documenting its successful implementation as the surest way to reduce fiduciary liability.
Top Fiduciary Stories in 2009
The topsy-turvy 2009 provided some of the biggest fiduciary stories in years. Which do you think rates as the most important?