A recent survey of plan sponsors revealed that more than a third were not aware of their status as fiduciaries.
That lack of awareness has actually increased in recent years, according to an Alliance Bernstein plan sponsor survey. In the 2011 survey, 30% of plan sponsor respondents didn’t realize they were a fiduciary; in the 2014 survey, 37% of the 1,000 plan sponsors surveyed were ignorant of their status, and thus probably their responsibilities. Not that they weren’t aware of the importance of such matters: Four out of five plan sponsors (82%) in the survey said fiduciary matters were important or very important, and 70% believed that all individuals who served in a fiduciary capacity at their plan were aware of their status.
Alliance Bernstein did note some demographic differences. Nearly half the respondents from the smallest plans (those with less than $1 million in assets) didn’t know they were fiduciaries, while respondents from the largest plans, with their dedicated staff and legal advisors, tended to have a much better understanding of their fiduciary obligations. Using a financial advisor or consultant also made a difference among sponsors from plans with less than $500 million in assets. Those who didn’t use an advisor were more likely to say they were not fiduciaries than those who did (30% vs. 18%).
Roles within the organization and the plan also mattered. Human resources/benefits professionals were more likely to say they were not fiduciaries (42%) than either senior executives (35%) or treasury/finance representatives (32%). Additionally, respondents who said they were part of a plan’s administrative committee were twice as likely as other respondents to be unaware of their fiduciary status.
The survey also found that 87% of plan sponsors offering target-date funds said fiduciary concerns were important or very important, compared with 77% of those planning to offer TDFs and 79% of those not planning to offer them.
Respondents who didn’t consider themselves fiduciaries were more likely to say their organization didn’t provide training — 44%, compared with 30% of those whose companies did provide training.
