Plan sponsors that rely on passively managed investment options as a hedge against fiduciary liability may be operating under false premises, according to analysts at Russell Investments.

In the wake of a decade's worth of 401(k) class-action litigation, fee-conscious sponsors have outfitted investment lineups with passively managed mutual funds and target-date funds.

While awareness of fees is a welcomed development, the misperception that passive investments eliminate fiduciary obligations is dangerous, write Kevin Knowles, and analyst on Russell's defined contribution team, and Josh Cohen, head of the institutional defined contribution team at Russell.

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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.