Articles

Sponsors of 401(k) Plans Must Heed Supreme Court Warning by Sean Deviney, CFP


Posted on September 30, 2015 by Richard Berkowitz

A recent U.S. Supreme Court decision reaffirmed that the fiduciary duty of employers sponsoring 401(k) plans extend beyond the six-year statute of limitations. In its unanimous decision, the court ruled that 401(k) fiduciaries must monitor investments, dispose of inappropriate assets and minimize management fees on a continuous and regular basis. According to the court, “an ERISA fiduciary’s duty is derived from the common law of trusts… and a trustee has a continuing duty to monitor trust investments and remove imprudent ones. This continuing duty exists separate and apart from the trustee’s duty to exercise prudence in selecting investments at the outset.”

 

This ruling is an important reminder that plan sponsors should develop detailed investment policies and take steps to follow and documents prudent fiduciary principles. The professionals with Provenance Wealth Advisors work with businesses of all sizes to design benefits plans and implement best practices to meet regulatory compliance and serve the needs of plan sponsors and participants.

 

About the Author: Sean Deviney is a CFP®* professional and retirement plan specialist with Provenance Wealth Advisors, an independent financial services firm that often works with Berkowitz Pollack Brant Advisors and Accountants. For more information, call 800-737-8804 or email info@provwealth.com.

Provenance Wealth Advisors, 515 E. Las Olas Blvd., Ft. Lauderdale, FL 33301 (954) 712-8888.

Securities offered through Raymond James Financial Services, Inc., Member FINRA/SIPC.

Raymond James is not affiliated with and does not endorse the opinions or services of Berkowitz Pollack Brant Advisors and Accountants.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of PWA and not necessarily those of Raymond James. You should discuss any legal matters with the appropriate professional. Prior to making an investment decision, please consult with your financial advisor about your individual situation. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete.

* Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.