"It can't happen to me" rings the oft-quoted lament of the denier. Today's 401(k) plan sponsors flummox financial professionals everyday with their collective unwillingness to recognize the extent of their fiduciary liability. Even when ERISA attorneys present them with blunt reality (see "401(k) Plan Sponsors and the Risk of Fiduciary Liability"), we regularly see the simple mistakes of plan sponsors leading to DOL fines and court settlements.
The DOL reported in a 2011 fact sheet it collected more than $1 billion in fines in FY 2010. If that doesn't scare the snot out of the typical 401(k) plan sponsor, the DOL revealed nearly four out of five of its investigations resulted in "monetary results for plans or other corrective action." Those, as they say, are worse than Vegas odds. But that's not the worst of it.
Things just got a lot tougher for 401(k) plan sponsors. Earlier this month, Phyllis Borzi, Assistant Secretary of Labor's Employee Benefits Security Administration, announced the new fee disclosure guidelines for ERISA plans. While fee disclosure falls under the duties of service providers, the DOL now requires plan sponsors to reveal those fees at both the plan level and at the participant level.
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