The number of claims against fiduciaries has increased threefold since the 1990’s, according to the North American Professional Liability Insurance Agency — with plan sponsors now surpassing the medical profession as targets for litigation. Last year, for example, the ABB, Inc. fiduciary lawsuit resulted in a $37 million judgment against plan fiduciaries, highlighting the importance to plan sponsors of following a prudent process when changing plan funds.
Since many plan sponsors don't have the necessary fiduciary expertise or resources in-house, they partner with outside investment experts. But do these partners really take on fiduciary accountability and mitigate risk?
A simple, three-page guide published recently by SEI Investments Management provides DC plan sponsors with an overview of ERISA fiduciary options and the corresponding risk considerations when it comes to their fiduciary roles — including understanding the differences in the fiduciary responsibilities between an investment advisor under ERISA 3(21) and an investment manager under ERISA 3(38).
