Following up on our recent post titled "Investigations into improper advice
" about the increasing number Department of Labor investigations into breaches of fiduciary duty, we found an interesting Businessweek
article by Anthony Effinger
. The article tells the story of an independent fiduciary being sued by retirement plans for breach of fiduciary duty. Sounds run-of-the-mill until you see that the independent fiduciary had said, "The fiduciary duty is the highest duty known to the law," when testifying a few years earlier before a congressional committee.
This story reminds us of several facts for 401(k) plan sponsors:
- Hiring an independent fiduciary does not necessarily shield you from liability.
- You shouldn't blindly trust people just because (or maybe especially if) they've testified before Congress.
- Even if you hire outside help, it is a good idea to be informed.
Good data can help you — trust but verify.
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