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Fiduciary Plan Governance, LLC Comment Letter to DOL on Proposed Fee Disclosure Guide (PDF)

"We think the best approach is to put the burden on the service provider to make the determination of whether it is subject to the guide requirement under consideration of the following factors: [1] Is the disclosure drafted in a manner understandable to the average person, and assuming the recipient has no knowledge or understanding of financial industry fee structures? [2] Is the disclosure only as long as is necessary to convey the required information consistent with the first factor? If the service provider cannot answer both questions in the affirmative, they would be subject to the guide requirement."

Fiduciary Responsibilities: An Overview for Retirement Plan Sponsors

"As a plan sponsor, you should regularly receive fee disclosures that include the following information: [1] A description of the services provided; [2] The status of the service provider as an ERISA fiduciary; [3] A clear statement of compensation and fees; [4] Termination charges, if any. They should become part of your permanent due diligence file after you've reviewed them to make sure they're complete and accurate. If you aren't getting them, ask. It's up to you to make sure you have the information you need."

Fiduciary Responsibility in Healthcare Plans

"An employer's management of the payment part is what raises fiduciary issues under ERISA. We know plan sponsors have fiduciary responsibilities for ERISA retirement plans like 401(k)s and 403(b)s but what's not as well understood is that, speaking very broadly, employers offering healthcare plans are obligated to act reasonably and prudently, to engage only necessary services, and not enter into unreasonable arrangements or pay unreasonable fees."

Is Using Active Investment Management a Fiduciary Breach? Part 6

"Is it prudent ... to include in fund lineups selections from a group that as a whole and even in highly select sub-groups consistently fails to deliver returns greater than low cost index tracking funds? Isn't the prudent choice to simply index everything at the lowest possible cost and be done, at least when it comes to 401(k), 403(b) and any other fiduciary plan fund lineup? ... Since, under ERISA, prudence is a process, begin by asking if the added cost of the active approach you are considering is justified given the low probability of achieving additional return."

Is Using Active Investment Management a Fiduciary Breach?

"The question ... for investment fiduciaries who typically delegate investment management to third-parties like mutual funds and professional investment managers may not be, 'Is using active management a fiduciary breach?' but 'Is there a way to select the right ones?' The answer may be both simpler and more difficult than most of us, including investment advisors and others who make their livings purporting to do so, imagine."

Will the DOL Fiduciary Rule Level the Playing Field for Brokers?

"Regardless of the standard that applies to them, in the eyes of their clients, brokers are offering investment advice. And the plan sponsor is acting on that advice. This the typical broker does without any processes or procedures that are protective of his client's (or even his own) interests.... The reproposal and finalization of the DOL's fiduciary definition rule (now expected in early 2015) will likely change things for brokers."

Is Using Active Investment Management a Fiduciary Breach? Part 5

"It seems that although over longer periods a small number of active managers have outperformed their benchmarks, there are not clear markers for identifying them. It also seems there may not be a clear way of evaluating whether an underperforming manager is unskilled (and, therefore, not fit to manage your money) or skilled but going through an 'out of favor' period."

Is Using Active Investment Management a Fiduciary Breach? Part 3

"[This article examines the claim that] funds with a high level of manager ownership ... is an indicator of likely superior -- index-beating -- return capabilities.... [The authors found that] 53% of funds with at least $500,000 of manager conviction invested in their funds failed to earn a grade of D- against the S&P 500 over 11 periods covering 20-to-30 years of comparative performance.... [Not] a clear signpost for anyone seeking to reduce the chances of selecting managers who underperform."

Is Using Active Investment Management a Fiduciary Breach? Part 2

"Despite a strongly held (and, at times, vigorously asserted) belief among investors -- as well as most of the financial services industry -- despite its disclaimer -- that past excess returns do imply a likelihood of a repeat in the future, our research and experience indicates the opposite: The most appropriate method of selecting active investment managers is defensive. That is, a risk minimization approach."

Transparency in Defined Benefit Plan Investing

"[L]ack of information impairs a plan's fiduciary's ability to protect the interests of the plan and exposes the plan fiduciary to personal liability. This applies from the initial analysis in the decision to invest through the period the plan holds the investment.... Rejection of investments based on transparency concerns is becoming quite common. Many institutional investors now realize they have the 'power of the purse' and will walk way from an investment if reasonable terms cannot be negotiated."