Larger Plans Use Fiduciaries
As retirement plans grow in size, so does the likelihood they will turn to advisers for fiduciary services—and have multiple people assigned as fiduciaries to their plan, according to the 2014 PLANSPONSOR Defined Contribution (DC) Survey. The vast majority (70.5%) of micro plans that employ advisers either do so in a nonfiduciary role or are unaware of whether the adviser is a fiduciary or not. On the other end of the spectrum, 59.5% of mega-sized plans that use advisers avail themselves of fiduciary services—the most common being those of a 3(21) fiduciary (42.8%). Among all plan sizes, 46.6% of sponsors say their adviser offers fiduciary services.
In line with these findings, 68.9% of micro plans have one to three people acting as responsible plan fiduciaries (RPFs), while more than half (51.9%) of large plans and 44% of mega plans have four or more people serving in that role. Among plans of all sizes that reported having RPFs, a plurality (33.9%) have between two and three governing the plan.
Interestingly, while nearly half of sponsors say their adviser provides fiduciary services, just 34% of advisers say they are a fiduciary to participants.
DC Plans: Is Your Plan Adviser a Fiduciary to the Plan?
| OVERALL | MICRO (<$5mm) | SMALL ($5mm–<$50mm) | MIDSIZE ($50mm–<$200mm) | LARGE ($200mm–<$1b) | MEGA (>$1b) | |
| Yes, 3(21) and 3(38) Fiduciary | 15.40% | 10.40% | 17.30% | 19.80% | 15.80% | 12.80% |
| Yes, 3(21) Fiduciary Only | 25.80% | 12.60% | 23.50% | 34.30% | 42.30% | 42.80% |
| Yes, 3(38) Fiduciary Only | 5.40% | 6.50% | 5.40% | 5.50% | 4.00% | 3.90% |
| No | 27.90% | 34.10% | 29.20% | 22.10% | 20.10% | 23.90% |
| Don’t Know | 25.40% | 36.40% | 24.60% | 18.30% | 17.80% | 16.70% |
DC Plans: How Many Responsible Plan Fiduciaries (RPFs) Does Your Plan Have?
| OVERALL | MICRO (<$5mm) | SMALL ($5mm–<$50mm) | MIDSIZE ($50mm–<$200mm) | LARGE ($200mm–<$1b) | MEGA (>$1b) | |
| 1 Person | 20.20% | 28.80% | 16.00% | 13.70% | 14.80% | 25.30% |
| 2 – 3 People | 33.90% | 40.10% | 37.80% | 24.30% | 20.60% | 17.60% |
| 4 – 5 People | 20.00% | 8.40% | 24.30% | 29.00% | 29.10% | 17.60% |
| >5 People | 11.60% | 1.80% | 10.80% | 22.70% | 22.80% | 26.40% |
| Don’t Know | 14.30% | 20.90% | 11.10% | 10.40% | 12.60% | 13.00% |
Advisers: Are You a Fiduciary to Clients’ Plans?
| 2013 | 2014 | |
| Yes, 3(16) | N/A | 3% |
| Yes, 3(21) | 57% | 59% |
| Yes, 3(38) | 23% | 27% |
| No | 22% | 24% |
Advisers: Are You a Fiduciary to Plan Participants?
| 2013 | 2014 | |
| Yes | 33% | 34% |
| No | 67% | 66% |
Source: 2014 PLANSPONSOR Defined Contribution Survey