Plan Committees and New Fiduciary Rule

Mid-April of 2017 will bring about the new fiduciary rule so it is important to be prepared for changes.

NAPA Net recently reported that Marcia Wagner, ERISA attorney, in a recent ERISA Law Newsletter by the Wagner Law Group, stated that the new rule “at least in its narrowest scope… would have no effect on plans that already have strong retirement plan committees comprised of qualified internal representatives aided by independent fiduciaries.”

Ms. Wagner details that the rule doesn’t expand the activities – retirement plan committee members are already ERISA fiduciaries since they carry responsibility for the management of their plan and assets. Nothing changes here.

However, there could be impact with service providers who may not have considered themselves as fiduciaries, such as consultants who make recommendations that may be perceived as advice not given “on a regular basis” or not meant to be the “primary basis” for investment decisions. The new rule details as fiduciary any investment-related communication that “‘would reasonably be viewed as a suggestion to engage in or refrain from taking a particular course of action… even if the communicator does not intend to give definitive advice.”

She goes on to suggest that this change has the potential to increase fiduciary liability and suggests that committee members might want to review their fiduciary liability insurance. She also mentions that this seemingly higher risk could inflate fees charged by a service provider since s/he is now perceived as a fiduciary. This change should be considered by the plan committee – as should the new possibility of conflicts of interest on the part of the service provider.

Lastly, Ms. Wagner points out that the changes could have more impact on Human Resources staff than on retirement plan committee members and recommends that investment education and distribution options should be considered since the new rule impacts communications.

Please feel free to contact Patricia Neal Jensen with any questions regarding fiduciary administration. You may contact her at patricia.jensen [at]

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