PLANADVISER - Winter 2023 - 12
Nuts & Bolts
Fiduciary 101 for Plan Committees
Basic Concepts
When he oversees initial fiduciary
training, Steven Kaczynski Jr. wants
committee members to understand
four fundamentals about being subject
to the Employee Retirement Income
Security Act's fiduciary standards: 1)
what it means to use discretion in
making decisions, such as approving
investment options, on behalf of the
plan's participants; 2) the importance
of always acting with prudence and in
the best interests of participants; 3) the
need to have sound processes for fiduciary
decisions; and 4) why " reasonableness "
is so important in evaluating
a plan's fees.
" In explaining what decisions are
fiduciary decisions, we also explain
what decisions are not fiduciary decisions,
because they are settlor decisions, "
says Kaczynski, a senior financial
adviser and managing director
of fiduciary plan solutions at DBR &
Co. in Pittsburgh. Settlor activities
include many plan design decisions,
for example.
Advisers also need to convey the
seriousness of taking on fiduciary
responsibilities but not scare people
away, according to John Ludwig, a
partner in and the founder of LHD
Retirement,
in
Indianapolis.
" We
" WE EXPECT that sponsors know everything they need to
know, when, in reality, they wear multiple hats, and fiduciary
education is crucial, " says Jim Lyday, managing director of
Pensionmark Nashville. Pensionmark runs training sessions
for committees of its new clients, and " we spend a lot of
time breaking information into small, bite-sized pieces of
ongoing information. This education should be continual. "
12 planadviser.com | Winter 2023 | Plan Management Art by Marc Rosenthal
explain that if you are a fiduciary, you
have risk, and that risk is if you don't
act in the best interests of the plan and
its participants, " he says. " What we try
to convey is that if you don't do something
appropriate, you subject your
personal wealth to risk [via a negative
lawsuit outcome]. Then we explain
that there is fiduciary insurance for
the committee itself, to cover that. "
It is very easy to convey the
seriousness just by discussing the
amount of retirement plan litigation
that exists these days, Lyday says.
To keep committee members from
getting too worried, he reassures
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PLANADVISER - Winter 2023
Table of Contents for the Digital Edition of PLANADVISER - Winter 2023
Publisher’s Note
Just the Facts
On the Move
Nuts & Bolts
What’s Next?
Best Foot Forward
2023 PLANADVISER National Conference
Cybersecurity Conference
Let It Ride
Cultivating Connections
The Risks of Custom TDFs
Managed Account Services
People-Savvy
Be Sure They Get the Message
End Paper
PLANADVISER - Winter 2023 - Cover1
PLANADVISER - Winter 2023 - FC1
PLANADVISER - Winter 2023 - FC2
PLANADVISER - Winter 2023 - Cover2
PLANADVISER - Winter 2023 - 1
PLANADVISER - Winter 2023 - Publisher’s Note
PLANADVISER - Winter 2023 - 3
PLANADVISER - Winter 2023 - Just the Facts
PLANADVISER - Winter 2023 - 5
PLANADVISER - Winter 2023 - 6
PLANADVISER - Winter 2023 - 7
PLANADVISER - Winter 2023 - On the Move
PLANADVISER - Winter 2023 - 9
PLANADVISER - Winter 2023 - 10
PLANADVISER - Winter 2023 - 11
PLANADVISER - Winter 2023 - Nuts & Bolts
PLANADVISER - Winter 2023 - 13
PLANADVISER - Winter 2023 - What’s Next?
PLANADVISER - Winter 2023 - 15
PLANADVISER - Winter 2023 - 16
PLANADVISER - Winter 2023 - 17
PLANADVISER - Winter 2023 - 18
PLANADVISER - Winter 2023 - Best Foot Forward
PLANADVISER - Winter 2023 - 20
PLANADVISER - Winter 2023 - 21
PLANADVISER - Winter 2023 - 2023 PLANADVISER National Conference
PLANADVISER - Winter 2023 - 23
PLANADVISER - Winter 2023 - 24
PLANADVISER - Winter 2023 - 25
PLANADVISER - Winter 2023 - Cybersecurity Conference
PLANADVISER - Winter 2023 - 27
PLANADVISER - Winter 2023 - Let It Ride
PLANADVISER - Winter 2023 - 29
PLANADVISER - Winter 2023 - 30
PLANADVISER - Winter 2023 - 31
PLANADVISER - Winter 2023 - Cultivating Connections
PLANADVISER - Winter 2023 - 33
PLANADVISER - Winter 2023 - The Risks of Custom TDFs
PLANADVISER - Winter 2023 - 35
PLANADVISER - Winter 2023 - Managed Account Services
PLANADVISER - Winter 2023 - 37
PLANADVISER - Winter 2023 - People-Savvy
PLANADVISER - Winter 2023 - Be Sure They Get the Message
PLANADVISER - Winter 2023 - End Paper
PLANADVISER - Winter 2023 - Cover3
PLANADVISER - Winter 2023 - Cover4
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