What Should Fiduciaries be Documenting?

May 14, 2012 at 8:52 am Leave a comment

Daniel Wille of Littler Mendelson wrote a great article, 401(k) Fiduciaries: Compliance Wasn’t Enough to Avoid Big Judgment, located at http://www.shrm.org/hrdisciplines/benefits/Articles/Pages/TakeHeed.aspx.  The court case described by the author indicates that the judge ruled against the employer because the employer did not negotiate fees and maintain investments solely in the interest of plan participants.   Please refer to my post with further details on the responsibilities of retirement plan fiduciaries at https://christinegurneyuspension.com/2012/05/11/fiduciary-responsibility.

My experience has taught me that most practitioners fall into two camps regarding documentation.  The practitioners that do not document thoroughly may be well meaning and feel they are doing the right thing, but they typically just want to avoid potential lawsuits and avoid responsibility for anything that might somehow go wrong.  Notably, the article above pointed out that a lack of documentation regarding their decisions was a factor in the ruling.   There is other great information in the article so I recommend reading it in full, but I believe fiduciaries should see this as a call to fully document and explain their decisions and actions as part of their accountability to plan participants.


Entry filed under: Ethics. Tags: , , , , , , , , .

Fiduciary Responsibility Plan Fiduciaries’ Responsibilities for Investment Management

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Christine Gurney

A pension professional who shares her thoughts and ideas about the pension world for industry members and anyone else interested.

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