Since the 1930s, securities legislation has protected the individual investor and, with congressionally backed SEC and Labor Department fervor, law and regulation continue to do so. The great body of ERISA-related rules has broadened the protective umbrella, and more recent constraints upon the mutual fund industry have conveniently defended individuals inside and outside retirement programs. Indeed, our old Wall Street compatriot, William H. Donaldson, who recently resigned as chairman of the Securities and Exchange Commission, has — with his bold steering of the commission to reinstate the independent mutual fund director rule in late June, shortly after a U.S. Court of Appeals had struck down the regulation — proved to be an astonishingly zealous seeker of investor safety, right down to the last day in office.
Nevertheless, as I discussed with public and private sector pension professionals at a recent national meeting, the reality is that millions of participants in thousands of retirement plans not only lack a voice in fund and administrative management, but do not have uniformly competent leadership in the fiduciary roles intended to protect those participants.
It is not a knock at the marvelous education programs of the International Foundation of Employee Benefit Plans, Brookfield, Wis., for multiemployer and public fund fiduciaries, or criticism of the stalwart but less cohesive efforts of public employee, teacher and uniformed safety associations to inform and advise their memberships, nor a dismissal of either the widespread best practices conferences among corporations or of the proper claim that corporate officials tend to be more ready for financial and fiduciary roles, to assert that existing programs, at best sporadic in their outreach, have not met our need for fiduciary competence.
Simply put, there is a need to meet minimum essentials for trustees and other fiduciaries and designated staff, perhaps through requisite education, indoctrination, examination and certification. Programs less rigorous than those for certified financial analysts or certified employee benefit specialists are clearly advisable for "volunteers" and for those appointed because of position or elected by peers. Regimens such as those designed by the largest state funds, or a readily accessible consultant college, might prove suitable. But we must move beyond lip-service planning and aborted efforts. Frankly, I suspect a PC-based tutorial and examination of the type afforded by NASD Inc., a non-governmental financial regulator, and many state insurance departments should follow reasonable Internet-based study
Who will create the program? My friends tell me I'm too old to merge North and South America, but there are professionals out there, especially among the labor-management and state and local funds, who might pursue the matter before Christopher Cox, nominated to succeed Bill Donaldson, or some other successor, perceives the need. I would be pleased to discuss the project should anyone contact me.