In the article “Pooled Retirement Plans Chilled by Conflict of Interest Concerns,” Bloomberg Law shared insights from benefits and executive compensation partner Fred Reish on providers awaiting guidance from the Department of Labor on potential conflicts of interest, such as self-dealing in pooled plans.
The publication explained that pooled employer plans offset the fiduciary responsibilities of several individual employers into a single pooled plan provider (PPP). However, the DOL has only issued a regulation on the registration process for PPPs so far.
“Our current system imposes an obligation on plan sponsors to be an expert on investments and fiduciary responsibilities — issues that are different than the core responsibilities of running most businesses,” said Reish. “Particularly as businesses get smaller, they rely heavily on their service providers to advise them and help them make decisions.”
Reish added, “If the service providers are already mostly responsible for the decisions being made, wouldn’t it be better to allow them to be the fiduciary?”
The full article is available for Bloomberg Law subscribers.