Retirement Plan Sponsors
If your company or institution offers a 401(k) or 403(b) plan, and you are the owner or key executive making policy decisions for that plan, then you are the responsible plan fiduciary. As such, you are bound by ERISA's exclusive benefit rule which means that your policy decisions must be made for the exclusive benefit of the plan's participants and beneficiaries. Those decisions include selecting the various plan service providers and the most appropriate investments.
The Department of Labor is on a mission with respect to the qualified retirement plan marketplace to increase transparency, reduce costs and conflicts of interest and improve participant success. New regulations empowering this mission will dramatically change the retirement plan landscape. Fiduciaries who understand these regulations and the spirit behind them and respond pro-actively should see an improvement in their plan's quality and services and potentially reduce their exposure to fiduciary liability. Those who ignore, or take these regulations lightly, do so at their own peril.
Service providers (record keepers, plan administrators, investment advisors, etc.) are now required to clearly disclose a plan’s total costs and other information to the DOL and also to you, the plan sponsor. As the responsible plan fiduciary, you will be required to monitor the compensation of service providers and evaluate the reasonableness of expenses paid by the plan among other considerations when selecting those service providers. Beginning in 2012 you will be required to disclose those costs to plan participants’ on their quarterly statements. This is going to be a game changer as most employees are unaware that they are paying anything for these services.
You must have a practice in place to demonstrate that you consistently and objectively review your plan’s fees, expenses and services to determine their reasonableness. Your current service providers may offer to do this for you, but since they are the very parties you are supposed to monitoring, they are unlikely to point out their own high fees or inferior services. The best way to obtain a truly objective assessment is to engage an independent fiduciary consultant with no conflicts of interest to help you fulfill your fiduciary duties.
Wealthview Capital serves as an independent fiduciary advisor to help plan sponsors -
- Compare and possibly reduce your plan's costs
- Improve available investment options and other plan services
- Increase employee participation
- Reduce your fiduciary liability
- Meet global standards of fiduciary excellence
Please contact us to discuss ways we may be able to make a meaningful difference in your plan and in the lives of your employees.