Exactly a month ago, we posted our third item on Scott Simon's remarkably important (and almost certainly under-appreciated) series on the process of delegating decision-making authority for ERISA plans to independent fiduciaries.
Last Thursday, Scott posted his fourth column on that topic. As usual, it's must-read material for anyone who cares about these things, a list of readers that should include plan sponsors, participants, service providers, and policy-makers. Here's a highlight:
The law of ERISA is clear that professional fiduciaries fully conversant with the ins and outs of ERISA laws and procedures ideally should run qualified retirement plans including 401(k) plans. And yet many, many (non-fiduciary) service providers in the retirement plan industry force (fiduciary) plan sponsors into an imprudent business model featuring 401(k) plans with investment options bearing high (and hidden) costs and woefully inadequate diversification of risk. No wonder very few plan sponsors have ever heard of the kind of significant risk mitigation discussed in this series that's always been open to them under ERISA.
We couldn't put it more clearly ourselves. Now go read the whole thing.
W. Scott Simon, "Delegation for Plan Sponsors (Part 4)," Morningstar.com, July 2, 2009