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August 15, 2008 at 12:00 PM
Officials at the U.S. Government Accountability Office says vague fiduciary responsibility guidelines may lead to gaps in 401(k) plan oversight.
When picking and overseeing plan investment menus, sponsors have to comply with Employee Retirement Income Security Act fiduciary obligation requirements, Barbara Bovbjerg, a GAO director, writes in a letter describing the GAO’s views sent to Rep. George Miller, D- Calif., chairman of the House Education and Labor Committee.
“Plan sponsors face challenges in fulfilling their obligations when fiduciary roles are not clearly defined or when sponsors lack important information about arrangements between service providers,” Bovbjerg writes.
In some cases, Bovbjerg says, plan sponsors and service providers have disagreed about whether the sponsors have successfully delegated investment selection fiduciary responsibility to the providers.
The U.S. Labor Department wants sponsors to get information about service providers’ compensation arrangements and potential conflicts of interest, Bovbjerg notes.
