US - The US Department of Labor (DoL) and the Securities and Exchange Commission (SEC) have issued guidance for pension plan fiduciaries on the potential conflicts of interest of pension consultants.
The tips, aimed at assisting fiduciaries of employee benefit plans to identify potential areas of concern, come on the back of landmark SEC findings which revealed inadequately disclosed “ongoing conflicts of interest” by pension consultants.
“The tips we are releasing today will help plan fiduciaries evaluate the objectivity of advice and recommendations furnished by their pension consultants,” said Ann L. Combs, assistant secretary of labor for the Employee Benefits Security Administration.
Fiduciaries must be provided the information necessary to ensure that advice is objective and not influenced by revenue sharing and other arrangements pension consultants may have with other service providers.
The guidance, Selecting and Monitoring Pension Consultants - Tips for Plan Fiduciaries, addresses questions raised in the SEC report, which indicates the potential conflicts of interest may affect the objectivity of advice consultants are providing to their pension plan clients.
These questions should help plan trustees navigate among the many choices in pension consultants and make informed choices that are beneficial to plan participants, said Susan F. Wyderko, director of the SEC Office of Investor Education and Assistance.
Included in the guidance is a list of relevant questions fiduciaries should ask their consultants to encourage better disclosure and information relating to potential areas of conflicts of interest.
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