A powerful option for 401(k) plan committees
Would you like to improve your 401(k) participants' opportunities while reducing costs and fiduciary stress? Dedicated fiduciary advisers could do all of this for you. These specialists have lacked a strong marketing presence in the United States, but they are gaining market share as companies recognize their many advantages.
In most U.S. companies, individual 401(k) committee members bear the entire burden of complex fiduciary stewardship. Without the necessary training, committees could unintentionally overpay for services or miss critical investment metrics that negatively impact the fiduciary standard of care (and participant benefit). But it doesn't have to be this way. Hiring the right fiduciary can help by:
- Assuring ERISA stewardship requirements are met
- Providing continuous independent oversight
- Filtering conflicted advice by non-fiduciary advisers
The old, familiar options have serious limitations in that they often expose committees to a false sense of stewardship. For instance, a vendor/adviser may propose the committee consider three mutual funds for a specific asset class that are reasonable recommendations on the surface. However, what regularly happens is the funds generating the highest vendor/adviser revenue are the selected choices. This may put the vendor/adviser’s interests above those of plan participants, which is a fiduciary breach.
An ERISA §3(38) investment manager (named fiduciary) can help because they are specifically contracted to make sure the participants' exclusive interests are served. These specialists are valued for their fiduciary protection and ability to bridge the gap that can exist when 401k committees place far reaching or unfair expectations on HR personnel regarding fiduciary matters.
Ready to learn more about named fiduciaries? Stay tuned for future blog posts or call me at 214-459-8190.
