A funny thing happened on the way to discussing the question "Will 2012 be the 'Year of Fiduciary'?" (FiduciaryNews.com, January 4, 2012). While industry veterans argued both sides of the question, they did agree on one thing: small 401(k) plan sponsors will likely be in for a surprise of the fourth kind.
(If you remember "Close Encounters of the Third Kind" then you know anything of the fourth kind cannot be good, especially when it involves probes and, well, you get the idea…)
Here's the problem for far too many small 401(k) plan sponsors: They believe they can safely hide behind the veil of ignorance when it comes to fees, conflicts-of-interest and, ultimately, the fiduciary duty they owe their employees. For some of these plan sponsors, they feel their liability is limited by the fact that they own most of the assets in their company's plan. For others, they've let the value of their friendships with their service providers prevent them from asking awkward questions. Finally, for the rest, they simply don't have the time, experience or resources to find the right questions to ask.
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Christopher Carosa
Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).
