Let’s first consider this question: Do 401k plan sponsors act more like the fiduciaries they’re supposed to be, or do they act more like retail investors? The J.D. Power survey doesn’t answer that question, but the experience of industry experts might provide some anecdotal evidence. “Most plan sponsors we talk to are exactly like that, they look at us as if we are crazy and making this stuff up to sell snake oil,” says Mark Levin, an Accredited Investment Fiduciary (AIF) from Florida. He adds, “It’s very frustrating, but eventually, over the next 20 years the DOL will somehow get the message out. They have a great website, but I don’t think any HR people or business owners ever look at it.”Courtenay Shipley, CRPS, AIF of Nashville, Tennessee says, “If ‘ERISA fiduciary’ or ‘fiduciary responsibility’ doesn’t have resonance with the plan sponsor and it’s not on their radar to even ask about, any broker and any product will do. Hopefully the fight continues simply for media attention to raise awareness, especially in the small to medium-size business marketplace. Don’t forget we live in a world where 401k plans are marketed by payroll and business solutions companies as though it were synonymous with ‘Would you like fries with that?’”
When plan sponsors acknowledge their fiduciary responsibilities and take it seriously the plan participants will be affected in a positive way. Not only will their fiduciary risks be minimized but the outcomes for the plan participants will improve.
Please comment or call to discuss how this affects you and your organization.
- ERISA §3(38) Fiduciaries and the Flavor of the Month (401kplanadvisors.com)
- Educational Seminar – 09/20/11 – For Business Owners Who Have a 401k Plan (epplefinancial.wordpress.com)
- Fiduciary Revolution. (401kplanadvisors.com)