“During the new year” is often the response to the question, “When are we going to take an in-depth look at the 401(k)Plan and all of our service providers?” Although it is not an annual exercise, reviewing service providers, including the Retirement Plan Advisor function, is being conducted more frequently than ever before. (It is no doubt that the spate of class action suits, such as the one announced on December 23, 2015 by Schlichter, Bogard & Denton, a law firm based in St. Louis on behalf of the 50,000 plus employees who participate in the Insperity 401(k) Plan, drive some of the current interest in benchmarking 401(k) plan service providers. This complaint was filed and the courts will determine if there were fiduciary breaches or mismanagement of the assets occurred within the $2 Billion plan.)
So how can part-time fiduciaries, retirement committee members and plan administrators take steps to be reasonably certain that they do not become the next Defendant in such a case? Recently the Society for Human Resource Management (SHRM) published a supplement to assist HR Managers in selecting Retirement Plan Advisors.
There are a variety of methods for a retirement plan committee to slice-and-dice the data when analyzing Advisor credentials and professional capabilities. One way that Retirement Plan Advisors are segmented is by the designations they hold – examples being: AIF, C(k)P, CFP & CPFA. This is not an exhaustive list, as The Financial Institutions Regulatory Authority recognizes (and lists) 163 Designations at the www.FINRA.org website.
When retirement plan fiduciaries are analyzing designations it is important to also consider the governing body of the designation and the continuing education learning requirement(s).
Retirement Plan Advisors need to be held to a Continuing Education standard which forces the advisor to continuously improve upon what they deliver to their clients. Part of what a plan fiduciary should be monitoring is the Continuing Education requirements of their own retirement plan advisor.
