FIDUCIARY
(fi doo/she er/e) n., a person to whom property or power is entrusted for the benefit of another, adj., held or founded in trust or confidence; depending on public confidence for value or currency.
Study ERISA case law and you will find a surprising variety of complaints leading to lawsuits. Cases filed for gross negligence or outright fraud are found side-by-side with cases filed over more mundane issues such as administrative oversights and simple human error. Poor recordkeeping and administration, custodial problems, conflicts of interest, and dissatisfaction with investment performance can all land a plan sponsor in court. Plan Sponsors need protection in all of these areas. They do not need providers who will disclaim all liability and refuse responsibility when it matters most. As an expert plan administrator, we identify ways to mitigate and reduce fiduciary liability for our clients by partnering with outside firms who can handle fiduciary concerns and functions.
- That they are both trustee and fiduciary for their plans
- That a Directed Trustee offers very little protection
- That they are personally liable and can be sued
- That the courts can hold them personally liable for mistakes made by others, even when the others are negligent
- That there is a solution
THE SOLUTION: AN ACTIVE ADVISOR FULL FIDUCIARY
No one can remove all liability from an employer, but OMNI identifies organizations who can function as the fiduciary with respect to the funds offered in a retirement plan. Our goal is to provide as many options to the plan sponsor as possible. Our partners accept the role-in-writing of a fiduciary; consequently, their responsibilities include investment advice to plan sponsor and its plan participants within the limits of two models described below-investment selection management.
TWO LEVELS OF FIDUCIARY SERVICE
Open Architecture offers great freedom but also great responsibility for plan fiduciaries.
Plan Sponsors may choose from two levels of fiduciary service based on who makes final decisions on the core investment fund menu. If an outside fiduciary has the final responsibility for the selection and monitoring of the fund menu, the plan sponsor will not share in the liability of the investment due diligence process. If the Plan Sponsor wishes to choose or add their own funds, it will be responsible for those choices, but without sacrificing the other aspects of our fiduciary services.
PRUDENT FIDUCIARY CHOICES
Cost is a factor in any purchasing decision, and prudent investing is no exception. Expense ratios play an important role in determining investment options for a qualified plan. With institutional asset managers, it is possible to combine high quality, superior long-term performance, and discounted pricing. Collective Investment Funds make obvious sense from a fiduciary standpoint for these reasons. It is no coincidence that consultants to Fortune 500 companies consistently turn to private asset managers for many of the fund options they recommend.