Barstein: A plan sponsor can fulfill its fiduciary responsibility to participants without being 404c compliant.
But remember a plan sponsor can fulfill its fiduciary responsibility to participants without being 404c compliant.
It does not give the plan sponsor enough information to judge the magnitude of potential conflicts.
FORBES: Investment Consultants: It's Time to Clearly Define Their Role (June 1, 1995)
Such additional due diligence should be undertaken by any plan sponsor prior to selecting an investment consultant.
FORBES: Investment Consultants: It's Time to Clearly Define Their Role (June 1, 1995)
Effectively, the plan sponsor (whether a private company or a government) provides insurance against underperformance of plan assets.
Also, the degree of influence the consultant has in the search process varies greatly from plan sponsor to plan sponsor.
If the plan is properly priced and well managed with periodic monitoring, the plan sponsor has nothing to worry about.
If a recordkeeper is delivering services to a plan sponsor as outlined in this regulation that recordkeeper becomes a functional fiduciary.
What is hard is to get the attention of the plan sponsor when they are busy trying to make the company successful.
Only by asking these questions can a plan sponsor be assured that the consultant is now appropriately benefiting from its relationship with the fund.
FORBES: Investment Consultants: It's Time to Clearly Define Their Role (June 1, 1995)
In an environment where market returns are limited and plan sponsor or taxpayer ability to fund pensions is increasingly strained, the cost of this corruption is unacceptable.
If a plan sponsor is having their plan re-priced, those inactive 401(k)s could spell higher fees for the plan sponsor and those with a 401(k) at that firm.
Arrogance: Anyone who challenges the plan sponsor is viewed dismissively.
FORBES: Corporate Sponsors Agree: 401(k) Plan Results Don't Matter (April 8, 2008)
Better utilization of staff time and decreased plan sponsor liability.
When the investment fiduciary accepts fiduciary status in writing and selects and monitors the investments, the liability of the plan sponsor and other plan fiduciaries is significantly reduced.
Given the current legal environment, in our opinion, no defined contribution plan sponsor should smugly conclude he is not at risk or unduly rely upon the assurances of his legal advisors.
If we go after the tax incentives for retirement saving, we must be careful not to inadvertently destroy the plan sponsor infrastructure that is the foundation of retirement security for millions of Americans.
FORBES: Tax Subsides for 401(k)'s Work, But Not for the Reasons You May Think
In my experience whenever an employer-plan sponsor has an investment advisory affiliate, rest assured, that affiliate will be selected, out of all the thousands of SEC registered money managers, to manage employee retirement monies.
FORBES: Conflicts Abound at American Airlines' Pension and 401(k) Plans
In a survey last November of 600 employers, 67% had tweaked their investment lineup, compared with about 10% in most years, said David Wray, president of the Plan Sponsor Council of America in Chicago.
They also appeal to investors who want to invest in something other than what 529 plans offer. (529 investment options are limited to what the plan sponsor offers, much like an employer-sponsored retirement plan).
FORBES: New Tax Law Resurrects Competitor To 529 College Savings Plans
Consequently, it is up to the plan sponsor to do an intensive due diligence of consulting firms prior to selecting a firm and craft a contract for services that reflects the unique concerns of the fund.
FORBES: Investment Consultants: It's Time to Clearly Define Their Role (June 1, 1995)
In other words, defense lawyers that have been advising their plan sponsor clients for decades at inflated hourly rates, amounting to millions annually, who were blind to abuses their clients are now being sued over, are good guys.
The goal is to prevent an employer-retirement plan sponsor with infinite resources, assisted by expert advisors, and limited incentive to tell the truth, from using arcane devices to pursue its own objectives whilst workers are kept in the dark.
FORBES: IBM 401(k) Participants Need Their Own "Shadow" Fiduciary to Guard Retirement Benefits
Whether you are a participant in a plan, or a plan sponsor, new Department of Labor regulations require that, perhaps for the very first time, you are about to get the information that will let you determine how good or bad your retirement plan is.
The purpose behind our agreeing to speak at the conference was to shake the plan sponsor audience out of its complacency, providing a counterpoint to the defense lawyers and industry participants that had been telling sponsors all the recent uproar about 401k mismanagement was much ado about nothing.
FORBES: Corporate Sponsors Agree: 401(k) Plan Results Don't Matter (April 8, 2008)
In order to ensure that consultants are at all times free of any conflicts in recommending managers, plan sponsors should establish the following on-going procedure: whenever a consultant recommends managers to the plan sponsor, disclosure should be made at that time of any fees or other consideration paid by the manager to the consultant in the previous three years.
FORBES: Investment Consultants: It's Time to Clearly Define Their Role (June 1, 1995)
Blackwell doesn't plan to sponsor her, but the two maintain a special bond.
Given industry marketing pitches, it should come as no surprise that employers regularly lose sight of the fact that under ERISA, the sponsor remains responsible as the named fiduciary to the plan even when the sponsor delegates or outsources management of the plan.
FORBES: Flawed 401(k) Plan Structures to Blame for Systemic Failure
Both the pathetic 13% participation rate and alarming 44% company stock asset allocation are facts well-known to the sponsor of the plan which, if it cared about worker preparedness for retirement, the sponsor could have done something to address.
Organizers plan to stoke audience and sponsor interest with a series of races in the off-years, starting in September 2004.
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