Today is an important day for fiduciaries. So was yesterday and so is tomorrow. Although we appreciate that any “National ______ Day” might bring awareness to the issue that fills in the blank, we’ve been talking over the last five days about the ongoing nature of your fiduciary responsibilities and a path to satisfying them. Here’s a recap, complete with links to the five entries.
Step 1: Understanding Who is Responsible for Your Plan’s Investments. Many trustees do not have an accurate understanding of who bears this responsibility. Examine the options and ensure that they not only know the correct answer, but have also considered the alternatives (including the ability to shift responsibilities to an ERISA 3(38) fiduciary investment manager.)
Step 2: Your IPS and Process. How can fiduciaries satisfy process-based standards without implementing clear processes? Three related steps will help: (1) implement an Investment Policy; (2) follow it; and (3) memorialize the process.
Step 3: Fiduciary Education/Training. Is it fair to ask employees to accept significant fiduciary responsibilities and the corresponding liability, but not help them to understand those responsibilities and how to satisfy them? Initial training and ongoing education is paramount for your fiduciaries.
Step 4: Vendor Benchmarking. There are a handful of clear reasons to ensure you’ve benchmarked your recordkeeper and TPA: (1) federal regulations suggest it; (2) federal courts recommend it; (3) the marketplace has changed rapidly; and (4) many employers care to do right by their employees. A market-based process – and the corresponding competition – will best serve your employees.
Step 5: Putting Your Employees’ Interests First. Fiduciaries bear the duty of loyalty, which includes the responsibility to make decisions in their participants’ best interests. Employees need help. They want help. And the healthiest of fiduciaries are those who recognize the importance of providing services, tools, investments, and fee levels that best suit participants’ interests.
Moving Forward With Fiduciary Wellness. One day is not enough to learn how to be a good fiduciary. The last five days provided a better opportunity to provide more comprehensive and helpful information, but this marketplace demands more in terms of ongoing care, skill, diligence, and prudence. More importantly, your employees demand and deserve more. Please contact any member of the QPA team if you have an interest in your trustees and committee members receiving additional education and training that will help with their fiduciary wellness levels.