Earlier this month, the Trustees of Princeton University settled a class action suit brought by participants in their retirement plan claiming fiduciary breaches regarding investment options and fees paid by plan participants.
While the terms of the settlement have yet to be announced, it is safe to assume that similar to the recent settlements by Duke and MIT, it will be in the millions.
In many of these cases, the settlement funding is being satisfied in part, or its entirety, from the insurance company that provides fiduciary insurance to the employer. However, the insurance companies bearing these costs have started to notice the amounts paid, and insurance clients are getting more questions about process and results from their fiduciary insurance underwriters.
Earlier this spring, one of the largest fiduciary insurance providers in the country circulated to clients a list of questions as part of the renewal. The questionnaire very simply gets to the primary fiduciary risks that employers face.
- Plans loaded with proprietary investments
- Unmonitored provider fees
- Consultants with revenue conflicts
- Failures to monitor share classes or investment performance
For most of our clients this is the period where we’ll be reviewing these issues and creating the necessary documentation to demonstrate the strength of our process. The goal for every plan fiduciary is to get the basics right so you can move on to other issues enhancing plan performance. However, in the hurry to move on many sponsors haven’t created bullet-proof processes to ensure the basics of a prudent fiduciary process are managed.
For a detailed list of the questions sent, please click the button below.
