Duty to Monitor at Heart of Fiduciary Solution from Cornerstone

The new fiduciary support solution aids retirement specialist advisers and their clients in meeting the strenuous requirements of ERISA and other investing and benefits laws—without getting in the way of the existing adviser-client relationship. 

Sitting down with PLANADVISER to discuss his firm’s new fiduciary support solution for advisers and their plan sponsors clients, John Riley, chief strategist at Cornerstone Plan Sponsor Consulting, stressed the solution is not meant to supersede any of the good work the plan adviser might already be doing.

“With our solution we are not coming in and trying to take over a plan. Instead, the solution is purely focused on helping to establish fiduciary excellence. It is branded with the adviser’s own logos and marketing collateral, and simply represents a bolt-on service that we provide as an independent third-party,” Riley explains. “We have found advisers and sponsors really value this complementary, independent approach.”

Riley explains the firm first got to work on an independent fiduciary support solution “way back after first hearing about the groundbreaking case of Tibble vs. Edison,” as the case first made its way through the district and appellate courts, eventually reaching the Supreme Court.

“There are a lot of lessons for plan sponsors and advisers to take away from that litigation,” Riley says. “One of the main lessons is about the crucial importance not only of documenting the deliberation that went into your initial decisions with respect to a plan investment or a plan design change—but also the importance of continuing to monitor, deliberate and document on an ongoing basis.”

To this end, the solution from Cornerstone offers template policies and procedures for guiding the fiduciary plan monitoring process. According to Riley, “all the parts of running the plan are covered in here.” The solution helps plan sponsors create a “fiduciary file” that proves their due diligence activities.  

“Plan advisers and sponsors can file key paperwork directly through the system,” Riley adds. “It also provides a yearly archive of all fiduciary documentation that can easily be recalled and utilized in the case of an audit or questions in the future. Overall, this solution adds a helpful framework around the whole compliance and documentation process.”

Also as part of the solution, plan sponsors receive helpful education about all the moving parts of fiduciary liability and exactly what are the duties and responsibilities of all parties involved in plan management—the recordkeeper, the third-party administrator, the fund manager, the broker, the consultant, etc.

“Plan Sponsors are always fiduciaries,” Riley concludes. “There is no getting around it. However, many of the fiduciary duties can be handled by others. This relieves the plan sponsor from some responsibility, but in the end, the sponsor is responsible to supervise those that take on delegated fiduciary duties.”

More information is available here