When retirement plan investments lose value, participants, and their lawyers, often target plan fiduciaries with for the blame. Because target-date funds (TDFs) usually hold the lion’s share of plan assets, they may present the lion’s share of fiduciary risk.
Your best defense, whether to plaintiffs’ lawyers or to Department of Labor (DOL) investigators, is a document that shows you accounted for all relevant factors in selecting and monitoring a plan’s investments. Brad Campbell, a partner at Faegre Drinker Biddle & Reath LLP, shares an ERISA [Employee Retirement Income Security Act] attorney’s views on fiduciary responsibilities and risks. He also describes how plan fiduciaries can reinforce processes and seek to mitigate liability with a new online analytical tool he helped develop that uses plan demographics and the DOL’s own guidelines for documenting your selection process.
The opinions expressed are those of the author and are no guarantee of the future performance of any American Century Investments fund. Brad Campbell and Faegre Drinker are not affiliated with American Century Investment Services, Inc.
Neither the paper nor the Target-Date Blueprint provide legal or investment advice. Plan fiduciaries should seek appropriate legal or other counsel to evaluate their specific circumstances.