Here\u2019s that in Ary Rosenbaum\u2019s voice \u2014 clear, direct, with a personal anecdote to drive the point home:<\/p>\n
I\u2019ve talked a lot about institutional share classes, revenue sharing, and the alphabet soup of fund share classes. Maybe I was getting too technical \u2014 ERISAese, if you will. So let me break it down in plain English.<\/p>\n
No matter what it\u2019s called \u2014 institutional, admiral, or some fancy alphabet soup designation \u2014 the plan sponsor\u2019s job is straightforward: find the least expensive share class of a mutual fund that\u2019s available to the plan. That\u2019s it. Plain and simple. If they pick a higher-cost share class when a cheaper one is available, they\u2019re just asking for trouble. Someone will come knocking, accusing them of breaching their duty of prudence. And rightly so.<\/p>\n
It reminds me of a story about my cousin. Her father was wealthy because he owned a hat manufacturing business. We both had Apple II computers back in the day. She bought her copy of Print Shop at the local computer store for $60. I bought the same product by mail order for $32. Same software. The fact that her father overpaid was his problem \u2014 it was his money.<\/p>\n
A plan sponsor can\u2019t say the same thing. Overpaying with the participants\u2019 money is a breach of fiduciary duty. When you\u2019re a plan fiduciary, every penny counts \u2014 not for you, but for the people whose retirement you\u2019re entrusted to protect. No excuses.<\/p>\n
<\/span><\/p>","protected":false},"excerpt":{"rendered":" Here\u2019s that in Ary Rosenbaum\u2019s voice \u2014 clear, direct, with a personal anecdote to drive the point home: I\u2019ve talked a lot about institutional share classes, revenue sharing, and the alphabet soup of fund share classes. Maybe I was getting … Continue reading