It appears all but certain the floodgates will soon open wide, unleashing a torrent of trade association sponsored 401k MEPs. If you’re looking for the trigger that will open those floodgates, here’s what you should be paying attention to.
Tag "fiduciary"
Therein lies the conundrum. In the current environment, it may be far easier to overlook the failure to meet benchmarks with adequate consistency than it is to ignore the du jour ad hoc definition of woke.
MEPs have the potential to do what state-sponsored plans may not be able to offer – protection under ERISA. That’s in the employees’ best interests. If many embrace this concept, September 30, 2019 may indeed signal the dawn of a new day in retirement saving. Still, due diligence remains an imperative.
“The SEC’s Regulation BI is terribly disappointing. It not only fails to protect consumers; it actually makes the situation worse… The confusion that will ensue will be very damaging to investors nationwide.”
Just as summer changes into fall, Reg BI will change the way all participants – investors, service providers, and 401k plan sponsors – interact with each other. These are the changes we might expect.
The bottom-line is employees may be setting themselves up not only for failure, but for a costly failure. This is why it’s vitally important for employees to understand more than just the simple objective and class of the mutual funds they own.
The prevailing consensus has been corporate executives work for their owners (i.e., shareholders). That all changed on August 19, 2019. What are the fiduciary implications?
If you think this evolution is amazing, just wait until you see what changes come about once the 401kMEP starts ramping up.
401k plan sponsors have a renewed focus on the three F-words of offering employee retirement benefits: Fiduciary, Fees, and Financial Wellness. Here’s how plan sponsors answer questions related to each of these three F-words.
Regulators (including the DOL) seem intent on splitting the baby in half by allowing two incompatible business models – one fiduciary with no self-dealing fees, the other non-fiduciary with conflict-of-interest fees – to coexist within the same market. Does this mean “fiduciary” has lost its inherent advantage?
