Some employees at Ameriprise, one of the larger financial planning firms is being sued for offering their own proprietary funds within their 401(k) plan. While the case is a class action lawsuit and the employees are being represented by a top ERISA litigator who has a penchant for these cases, it shows you that even people who are in the business of selling 401(k) plans can often neglect liability threats to their 401(k) plan.
I worked at a third party administration firm that switched its 401(k) plan from Fidelity to an insurance company based platform, just so they would save their premier pricing on that platform.
I worked for a law firm with ERISA partners that had a $25 million 401(k) plan with no financial advisor, no employee education, no investment policy statement, and no change of investment options in 8 years.
So while I emphasize how plan sponsors should minimize their liabilities, those in the business who should know better, don’t take care of their own plans. Sort of like the shoemaker’s children who have no shoes.
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