{"id":1708,"date":"2018-09-05T11:13:28","date_gmt":"2018-09-05T16:13:28","guid":{"rendered":"https:\/\/www.rixtrema.com\/blog\/?p=1708"},"modified":"2020-02-22T07:26:44","modified_gmt":"2020-02-22T12:26:44","slug":"how-to-help-plan-sponsors-avoid-litigation-and-limit-potential-losses","status":"publish","type":"post","link":"https:\/\/rixtrema.com\/blog\/how-to-help-plan-sponsors-avoid-litigation-and-limit-potential-losses\/","title":{"rendered":"How to help plan sponsors avoid litigation and limit potential losses"},"content":{"rendered":"

Every 401k plan sponsor has a fiduciary obligation to plan participants. If employees accuse a plan sponsor\/employer of not being able to act in the best interest of his employees, it can lead to litigation, money loss, and a damaged reputation.<\/span><\/p>\n

Therefore, the DOL has released several guidelines, in order to help avoid unwanted consequences; the following \u201cbest practices\u201d which have been mentioned in a recent article<\/a>. Here is short synopsis:<\/span><\/p>\n

    \n
  1. Investment diversification.<\/strong> Each investment of the portfolio should be considered in the context of the whole portfolio, in order to reduce the risk of massive loss, and avoid allegations.<\/span><\/li>\n
  2. Keeping administration fees\/expenses \u201creasonable\u201d.<\/strong> Any plan sponsor should compare proposals from multiple recordkeepers, to make sure that plan participants are not overpaying.<\/span><\/li>\n
  3. Investment performance monitoring.<\/strong> Each fiduciary should investigate performance of the existing plan and replace existing assets with better performing and cheaper options, when possible.<\/span><\/li>\n
  4. Conflicts of Interest Avoidance.<\/strong> If transactions between parties in interest (such as sales, loans, exchanges, etc.) are prohibited, it can lead to fiduciary liability.<\/span><\/li>\n
  5. Informing Participants and Beneficiaries.<\/strong> According to ERISA policies, all participants and beneficiaries must be regularly updated on plan changes.<\/span><\/li>\n<\/ol>\n

    Compliance with the best practices provided above will reduce your fiduciary liability and protect you from costly litigation. Be sure to also read Why Having a Fiduciary Process In Place Is Important<\/a><\/strong><\/span><\/em><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

    Every 401k plan sponsor has a fiduciary obligation to plan participants. If employees accuse a plan sponsor\/employer of not being able to act in the best interest of his employees, it can lead to litigation, money loss, and a damaged reputation. Therefore, the DOL has released several guidelines, in order to help avoid unwanted consequences;… <\/p>\n

    <\/div>\n

    Read More<\/a><\/p>\n","protected":false},"author":3,"featured_media":1709,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[180],"tags":[41,49,103],"class_list":["post-1708","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-plan-fiduciary","tag-401kfiduciaryoptimizer","tag-fiduciary","tag-plan-sponsor"],"jetpack_featured_media_url":"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2018\/09\/How-plan-sponsors-can-avoid-litigation-and-limit-potential-losses.jpg","yoast_head":"\nHow to help plan sponsors avoid litigation and limit potential losses<\/title>\n<link rel=\"canonical\" href=\"https:\/\/rixtrema.com\/blog\/how-to-help-plan-sponsors-avoid-litigation-and-limit-potential-losses\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to help plan sponsors avoid litigation and limit potential losses\" \/>\n<meta property=\"og:description\" content=\"Every 401k plan sponsor has a fiduciary obligation to plan participants. If employees accuse a plan sponsor\/employer of not being able to act in the best interest of his employees, it can lead to litigation, money loss, and a damaged reputation. Therefore, the DOL has released several guidelines, in order to help avoid unwanted consequences;... Read More\" \/>\n<meta property=\"og:url\" content=\"https:\/\/rixtrema.com\/blog\/how-to-help-plan-sponsors-avoid-litigation-and-limit-potential-losses\/\" \/>\n<meta property=\"og:site_name\" content=\"RiXtrema.com\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/LarkspurRiXtrema\/\" \/>\n<meta property=\"article:published_time\" content=\"2018-09-05T16:13:28+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-02-22T12:26:44+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2018\/09\/How-plan-sponsors-can-avoid-litigation-and-limit-potential-losses.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"852\" \/>\n\t<meta property=\"og:image:height\" content=\"480\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@RiXtrema\" \/>\n<meta name=\"twitter:site\" content=\"@RiXtrema\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\">\n\t<meta name=\"twitter:data1\" content=\"1 minute\">\n<!-- \/ Yoast SEO Premium plugin. -->","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/posts\/1708","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/comments?post=1708"}],"version-history":[{"count":3,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/posts\/1708\/revisions"}],"predecessor-version":[{"id":6136,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/posts\/1708\/revisions\/6136"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/media\/1709"}],"wp:attachment":[{"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/media?parent=1708"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/categories?post=1708"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/tags?post=1708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}