Conflicts of Interest (Part 4): Managed Accounts and Avoiding Prohibited Transactions

In an article for the Journal of Pension Benefits, benefits and executive compensation partner Joshua Waldbeser and counsel Joan Neri examine conflicts of interests that are prohibited transactions under the Employee Retirement Income Security Act and the Internal Revenue Code.

The article focuses on the prohibited transaction that could arise when service providers who are already acting in a fiduciary capacity to private sector retirement plans also recommend their managed account services for participants in those plans.

“Plan sponsors who are considering offering a managed account solution also should be aware of these [prohibited transaction] issues and related considerations in evaluating the fiduciary advisor’s services and fees,” the authors note.