SEC & DOL Provide Plan Fiduciaries with Questions for Pension Consultants

June 05, 2005

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If your firm serves as a pension plan consultant, then you should be prepared to answer the questions recently offered by the SEC and Dept. of Labor (DOL) to plan fiduciaries.

As explained by the SEC, investment advisors that provide consulting services to pension plans have a fiduciary duty to offer “disinterested” advice and fully disclose any material conflicts. Last month the SEC released a report noting that based on the results of a sweep of pension consultants, there are serious concerns that some investment advisors are not appropriately disclosing potential conflicts, which may effect their objectivity.

With this in mind, the SEC and DOL are encouraging better disclosure of the conflicts within the pension consulting business. As we mentioned earlier, every investment advisor working with pensions should engage in a thorough review of its practices and disclosures in order to ensure that they are in compliance with the Investment Adviser Act of 1940 and Employee Retirement Income Security Act (ERISA).

Posted by Bryan Hill
Labels: Pensions