Most companies that offer retirement plans to their employees risk fiduciary liabilities, according to Fiduciary Risk Management, a new subsidiary that CPA firm Habif, Arogeti & Wynne has launched specifically to address the issue.
In fact, of the approximately 10,000 labor-related lawsuits last year, 59% were ERISA-related.
“Most companies are convinced that they have completely complied with the law and are unaware of potential danger,” said Jessica R. Flores, managing director of Fiduciary Risk Management. “This is especially the case for Fortune 1000 companies where large assets, combined with unknown noncompliance, make them perfect targets for class-action lawsuits.
“Most companies expect to hear about problems or issues from their investment consultants or plan service providers,” she added. “However, their interests are quite different from those o the company’s. These organizations are first and foremost in the investment business, and they earn money from investment management fees and products the companies pay for. That means their primary focus is on investment performance, not retirement plan fiduciary complaint.”
Fiduciary Risk Management will work with clients to develop complete fiduciary programs inclusive of measurement tools to ensure ongoing compliance and investment education for participants. The company will also define at-risk groups among participants.