How does this duty apply with regard to participant fee disclosures?If a participant has a question about the new fee disclosures, the fiduciaries have a duty to make certain the question is fully and accurately answered. Many companies do not have a process in place to be certain that a knowledgeable plan representative is the person answering the questions. And many do not have a process for getting the right answer to the participant who is asking the question. Many companies have no process in place to confirm that a question was answered and was answered correctly.
If a participant, now seeing the fees she is paying in the new disclosure format, inquires about those fees and whether or not there are less expensive alternatives to direct her investments, it is going to be incumbent on the plan fiduciaries (unless the questioner is actually seeking investment advice) to give accurate and complete information. The failure to do so could lead to a claim down the road. There may be many other types of inquiries that could result from the new disclosures as well. Plan fiduciaries should be prepared with a sound process to make certain that the duty to inform is not breached.
The questions will come are you ready?
Please comment or call to discuss how this might affect you and your business.