Pass It Forward-Why Fiduciaries Should Consider Outsourcing Plan Investment Responsibility

Plan litigation looks poised to set new records in 2020, and DOL enforcement recoveries are on the rise. A recent DOL enforcement report indicates that DOL recoveries increased by 310% from fiscal 2016 to fiscal 2020.   Investment News just reported that fiduciary liability premiums are skyrocketing.

Fiduciaries are personally liable for losses caused by their fiduciary breach, and advice from their plan vendors about investments is not fiduciary advice required to be in their best interests. There is nothing wrong with this business model, but vendors receive fees from their proprietary investments and aren't required to warn you away from their funds that lag behind peers. Plan sponsor fiduciaries who take a do-it-yourself approach to plan investments face huge potential exposure for underperforming investments and excessive plan fees.