Don’t be Penny Wise and Pound Foolish

July 16, 2013

It is increasingly more important for plan sponsors to proactively engage ERISA counsel to provide on-going oversight of a retirement plan’s operational compliance and fiduciary governance.  Too often, plan sponsors rely solely on their investment advisor and/or plan recordkeeper to advise on these matters. However, neither party has legal authority and often lack the depth of knowledge or a holistic perspective. Further, conflicts of interest can arise when relying on a plan service provider to advise on matters related to their own deliverables. Since 2006, there has been unprecedented focus and increased regulations by the DOL on plan fiduciary requirements. Additionally, participant law suits and court rulings are dramatically impacting fiduciary decisions on plan investments, reasonableness of fees, and structure of fee payments. We recommend that ERISA counsel be engaged on an on-going basis to attend scheduled meetings between the plan’s investment advisor and the Plan/Investment Committee. These meetings often include matters that reach beyond investments and include plan operations/compliance, plan design, and fiduciary matters – all of which are under heightened scrutiny by the IRS, DOL, and now the Judiciary.


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