Worried while Washington fiddles? These three vital questions might just help you determine if today’s DOL ruling will increase your personal fiduciary liability.
Tag "ERISA"
If the evolution of indexing over the decades tells us anything, it tells us today’s budding index products “are not your father’s” index.
The wildness of the equity markets and the uncertainty of our economic environment appears to be opening the eyes of the typical fiduciary to more exotic investments. The practical implication may mean greater potential liability.
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.
Unless and until we can break the momentum of intertwined conflicts-of-interest, the greatest legacy we’ll leave our grandchildren’s children may be an outstanding bill to pay for spiraling public employee retirement benefits.
Here’s an issue that can perplex even the most experienced ERISA/401k fiduciary: What’s the difference between a broker and a Registered Investment Adviser? More importantly, does the difference significantly raise the fiduciary liability for the typical fiduciary?
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.
You may be an ERISA/401k fiduciary and not know it. The first step to reducing your personal fiduciary liability it to fully understand under what conditions you may be acting as a fiduciary.
