401(k) Governance Webinar Emphasizes Growing Fiduciary Focus
On June 4, 2007, Dr. Susan M. Mangiero, president of Pension Governance, LLC moderated a panel of experts who waxed poetic about current challenges for 401(k) plan stewards, their advisors and money managers. Click here to order the recording if you missed the event. (Past events are listed by original date with older events shown first.)
All three speakers agreed that more pressure on fiduciaries is inevitable. Mr. Blaine F. Aikin, AIF®, CFA, CFP® and Managing Partner (Fiduciary360) said that many people either do not understand their responsibilities or fail to recognize how to discharge duties properly. As the investment world becomes more complex, this gap between statutory requirements and reality is likely to grow.
Mr. David J. Bauer, Partner (Casey, Quirk & Associates LLC) explained how the asset management industry is changing to accommodate an undeniable trend away from traditional plans in favor of 401(k) offerings. He added that the asset management industry struggles with what products they can offer that will help plan sponsors manage their fiduciary risk. Everyone opined that both buyers and sellers are still too heavily focused on performance and should be more aware of risk-adjusted returns at a minimum. It was also agreed that adopting new products and strategies could increase fiduciary liability exposure if approved without demonstrating a solid understanding of risk.
Mr. David Vriesenga, Chief Rating Officer, with the Centre for Fiduciary Excellence, LLC spoke about the wave of new pension litigation cases. He explained that asset managers will continue to be targeted as defendants. Susan M. Mangiero commented that a forthcoming website, www.pensionlitigationdata.com, has more than ninety (90) percent of its investment fiduciary cases cross-coded as alleged breach of duty. Scary stuff!
All speakers agreed that change is a constant. Challenges for plan sponsors and money managers abound. Part of that has to do with the heavy (literally and figuratively) nature of the Pension Protection Act (PPA) of 2006.
Note to Readers: Do you understand everything about the PPA? If not, you are far from alone.
From this blogger's perspective, the introduction of complex products could hurt more than help (given the current state of investment fiduciary literacy).
The audience was reminded that good process is everthing.
How true!
