Retirement plan sponsors need to keep careful track of their decisions and avoid thinking of hiring outside consultants as a “get out of jail free card.”
Rick Unser, a plan risk management consultant in the retirement services arm of Lockton Inc., Kansas City, Mo., makes those recommendations on a commentary on a recent 7th U.S. Circuit Court of Appeals ruling on a retirement plan fiduciary duty case.
Lawyers for plan participants accused the employer of breaching its fiduciary duty by letting the plan generate low returns and incur high expenses.
A district court judge provided summary judgment in favor of the employer, but the appeals court required the district court to reconsider the case.
The court ruled that engaging consultants is a sign of employer prudence but does not free the employer from all responsibility for managing the plan, Unser says.