Podcast Center
Video Center
Webcasts
Resource Center
Events
May 21, 2013 at 10:29 AM
Fund firms managing employee retirement accounts make it needlessly difficult for plan sponsors to fulfill their fiduciary obligations, a new Dalbar study has found.
The Boston-based firm’s latest quarterly report assessing plan provider websites gives “excellent” ratings to just four of the 49 firms evaluated: John Hancock, Transamerica, ICMA-RC (a provider of 457 retirement plans) and Principal Financial.
“This quarter we found that, across the board, plan provider websites fail to support plan sponsor obligations for ERISA compliance,” Kathleen Whalen, Dalbar’s managing director, told AdvisorOne.
“Although the resources are there, a plan sponsor must do a tremendous amount of investigative work to locate and piece all the materials together in order to make use of the fiduciary support currently available on plan sponsor sites,” she added.
In performing its analysis, Dalbar says it put itself in the position of a “newbie plan sponsor” desperately looking for a middle path between having to become a full-fledged ERISA expert and the risk of breaching fiduciary obligations by not knowing enough.
In other words, because the business of plan sponsors does not typically make them experts in financial regulations, plan sponsors are looking for the guidance needed to remain compliant, yet fiduciary tools offered by provider websites suffer a number of deficiencies.
First, these tools are often not visible to their intended audience. Compliance calendars and timelines in 65% of cases were found to be 2 to 5 clicks deep in the website, Dalbar found.
Second, fiduciary resources that websites offered are often not specific to a sponsor’s plan, without an easy way to decipher what does and does not apply to the sponsor’s plan or how to translate a calendar-year-based schedule to a different timetable.
The Dalbar report offers relevant illustrations, including a positive Lincoln Financial Group compliance reminder that lists deadlines right on the sponsor’s landing page, thus making it easy for weary compliance managers.
