401(k) Fees: Participants’ Best Interests May Not Be Served by the “Race to the Bottom”
There’s good news for employers! Many have been on edge as they read about the “excessive fee” lawsuits filed against retirement plan fiduciaries, some of which have made their way to the U.S. Supreme Court. Or they’re shaken as they hear about the detailed fee document requests and questions from Department of Labor auditors to 401(k) and 403(b) plan sponsors and the fines and penalties that can result from DOL investigations.
While lawsuits and investigations have served a purpose in lowering plan fees, a side effect is that many plan sponsors, in their concern to meet compliance standards, have made a search for the lowest fees such a priority that they have unwittingly overlooked the best way to serve plan participants! In fact, when I meet with employers, they often first tell me they need to reduce plan fees to create a “hedge of protection” for themselves.
QDIAs...A Recipe for Fiduciary Protection (and a Better Retirement Plan)
A Qualified Default Investment Alternative – more commonly known as a QDIA – is a provision available to 401(k) and 403(b) plans that reduces the potential personal liability of plan fiduciaries while improving the ability of participants to build toward retirement. For many employers whose plan doesn’t currently have a QDIA, only a few steps are required to take advantage of its benefits.
Are You Ready? Simplifying Tasks and Reducing Risk Under the Fiduciary Rule
The Department of Labor’s Fiduciary Rule, which changes the 401(k) and 403(b) investment management landscape for both plan sponsors and advisors, took effect June 9th. Are you ready? As a plan sponsor fiduciary, your responsibility – and potential liability – just increased!