PLANSPONSOR - November - December 2023 - 2

INSIGHTS
PUBLISHER: Alison Cooke Mintzer
alison.mintzer@issmediasolutions.com
CREATIVE DIRECTOR: SooJin Chun Buzelli
soojin.buzelli@issmediasolutions.com
MANAGING EDITOR: Judy Faust Hartnett
judy.fausthartnett@issmediasolutions.com
Participant
Best Interest
T
he Department of Labor recently introduced a proposal that expands who or what is
an investment advice fiduciary. Forging the path to this latest revision of the fiduciary
rule has taken years, with iterations over a few presidential administrations.
The five-part test for determining whether someone is a fiduciary as defined
under the Employee Retirement Income Security Act does seem to be outdated, based
on the way plans have evolved and on how plan sponsors and participants look to
advisers and consultants for guidance about what to do with, respectively, their plans
and savings.
This proposal would replace the five-part test with a three-part test in which
satisfying any one of the three conditions would
make the adviser a fiduciary. If implemented,
the change would effectively create a stricter
regulatory environment for financial professionals
advising or selling investment products
related to retirement savings.
As is the case with any proposed regulation,
the response has been mixed, with industry
groups weighing in both for and against the
proposal. However, most of these groups don't
appear to represent the plan sponsor or the
participant but instead, generally, those that are
selling the investment products.
So, as I've been reading these statements
and comments from entities and attorneys and
thinking about the proposal, I've tried to look at
EXECUTIVE EDITOR, PLANSPONSOR.COM:
Amy Resnick, amy.resnick@issmediasolutions.com
EDITORIAL STAFF: Natalie Lin, Paul Mulholland,
Alex Ortolani, Remy Samuels, Karen Wittwer,
Jonathan Yardley, Noah Zuss
CONTRIBUTORS: Beth Braverman, Elizabeth Harris,
Kimberly Lankford, Bailey McCann, Ed McCarthy
SURVEYS AND RESEARCH: Garrett Cox,
Kimberley Gonzalez-Quiles
DESIGN AND PRODUCTION: Donna Bien-Aimé,
Alanna Jacobs, Maria Kofman, Samantha Yu
DESIGN CONTRIBUTOR: Cherese Rambaldi
ART CONTRIBUTORS: Chris Buzelli, Joseph Ciardiello,
Mar Hernández, Matt Kalinowski, Wenting Li,
Katherine Streeter, Anja Susanj, Klaas Verplancke,
Gizem Vural, Ellen Weinstein, James Yang (cover)
... you don't
want them
to lose all those
benefits by
moving into
a too expensive
or complex
product.
it from the employer's point of view. You, as an employer, especially one who reads
PLANSPONSOR, are trying to provide a strong retirement plan for your employees-
employees who often want guidance regarding what to do with their savings as they
progress in their career and into retirement.
As participants grow older and increasingly seek support for what to do with their
amassed assets, they want to trust that someone is giving them advice or product
recommendations with their best interest at heart.
As a plan sponsor, who has worked to negotiate appropriate fees and a strong
investment lineup for your participants, you don't want them to lose all those benefits
by moving into a too expensive or complex product.
In recent years, a number of companies have been racing to become the go-to
providers in the retirement income, retirement advice, and rollover markets.
Regardless of what happens with this latest proposal, it's a reminder that plan sponsors
can and should ask questions of anyone trying to get in front of plan participants to
offer them services and products via the employer relationship. What will the individuals
be charged, and how does that compare to the cost of offerings available to them in
their current plan? Whether the regulation requiring those providers to be a fiduciary is
enacted as such or not, as a plan sponsor, you want to ensure that whomever you connect
to your employees, and participants, that person will be giving them sound advice.
-Alison Cooke Mintzer, Publisher
2 PLANSPONSOR.COM November - December 2023
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PLANSPONSOR - November - December 2023

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