Charles C. Scott
Pelleton Capital Management Ltd.
Scottsdale, Arizona
Plan sponsors and their investment committees (whose members are fiduciaries and bear personal liability for fiduciary breaches) are not the guarantors of investment performance and are not required to search out the lowest cost investments or service providers, but they are required to follow and document conformity with prudent investment practices. Having a well-crafted investment policy statement and documenting conformity with its implementation, monitoring, and evaluation provisions will help insulate fiduciaries from liability.
Further, when benchmarking administration and procedures to best practices, plan sponsors and their investment-committee members should specifically benchmark their conformity to a prudent investment fiduciary standard. Plan sponsors that wish to have an independent assessment of such conformity and that would see the benefit of demonstrating that to employees as a means of forestalling employee criticism or lawsuits should consider applying to a fiduciary assessment organization such as CEFEX.
Roger Levy
Managing Director
Cambridge Fiduciary Services LLC
Via e-mail
Corrections:
In "Watching Where You Misstep" (InTech, April), we incorrectly stated the position that Greg Zaffiro holds at Platinum Partners. He is the firm's managing director.
An April letter headlined "Modest Proposal" suggested that $787 billion in federal bailout money would be better spent by distributing it directly to 300 million Americans. As many readers pointed out, that would amount to $2,500 per person, as opposed to the $250,000 per person that the letter writer claimed. We were so excited at the prospect of a six-figure payout that we failed to catch the error.
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