Fiduciary DOL Proposal Puts CFO Liability in Question.

Any plan provider that refuses to agree in writing to serve as the ERISA 3(38) investment manager should be asked why not. Why will they not be accountablefor the investment choices being offered by the plan. The reason in most cases is there is a conflict of interest. Plan sponsors must begin to realize that they must act in the best interest of the plan participants and their beneficiaries. They are personally liable for these decisions.

Fiduciary Trust Building
Image by ToastyKen via Flickr

For now, CFOs serving as fiduciaries will need to ferret out this information themselves. One easy way to do that is to require that any consultant providing investment advice to the plan fiduciaries specifically acknowledge (in writing) that the consultant agrees to be treated as a fiduciary under ERISA. CFOs with fiduciary responsibility may want to consider implementing that change now. (On a separate note, many CFOs of public companies with retirement plansholding company stock have stepped down from fiduciary committees in light of potential conflicts between securities laws, ERISA, and related “stock drop” litigation.)

The new fiduciary standard for retirement plans will improve the quality of the plans corporations provide for their employees. Corporate executives can improve their plans immediately by asking their plan provider to agree in writing to serve as the ERISA 3(38) Investment manager. This makes the plan provider accountable for the investment choices in the plan.

Please comment or call to discuss how this can help your company offer a true benefit to your employees.

  • What ‘Fee Disclosure’ Rules Really Mean for Plan Sponsors (
  • ERISA Plans’ Ultimate-and Criminal-“Prohibited Transaction” Rule of 18 USC 1954 (
  • Brokerages may have to change business practices: DOL (
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