It's a bird. It's a plane. No it's an investment fiduciary!

In one of my favorite superhero series, Spiderman, Peter Parker’s Uncle Ben once said “With great power comes great responsibility.” Something similar can be said for being a plan fiduciary for a 401(k) plan.

In recent years there seems to be a lot of misconceptions by plan sponsors of 401(k) plans on whether they are or are not a fiduciary to the retirement plan. While the reality is that every plan sponsor is a plan fiduciary, a 2016 survey by Alliance Bernstein determined that less than half of small plan sponsors are aware they are a fiduciary.

So now that we’ve established every plan sponsor is a fiduciary when it comes to 401(k) plans, what are fiduciaries actually responsible for? The real answer is A LOT. For starters, there are thousands of investments to choose from. But you’re not an investment expert, you’re an IT professional, mechanic, doctor, etc…So now what? 

As a fiduciary, if you are not an expert in the various areas of running a 401(k) you have a duty to the plan participants to find those who are experts and hire them. Sounds expensive, but it doesn’t have to be. The good news is, CoPilot provides these services without breaking the bank. Many plan sponsors struggle with responsibilities that fall under the investment realm. CoPilot offers full scope investment fiduciary coverage with a named investment fiduciary (eRIA) and a 3(38) investment manager (Wilshire Associates). Now, what does it all mean? Below are investment management tasks CoPilot takes off your plate:

  • Create and manage the Investment Policy Statement
  • Maintain procedures for managing the investment process
  • Appoint and monitor a 3(38) Investment Manager
  • Select, monitor and make changes to the investment menu 
  • Benchmark investments
  • Perform proxy voting on investments
  • Select and monitor Qualified Default Investment Alternatives (QDIA)

While you cannot offload all of your duties as plan fiduciary, by hiring an investment fiduciary service your role may become a whole lot easier. Contact us today to learn more about how CoPilot can make you feel like a superhero when it comes to offering a 401(k) plan. And yes, we do wear capes around the office.

What are Fiduciary Services?

Ryne Lambert, MBA - Financial Services Representative Team Lead - rklambert@pai.com - 800-236-7400 x3491

Ryne is a subject matter expert on 401(k), retirement savings, investments, participant advice, personal finance education and behavioral finance.