The GAO today repeated its recommendation that Congress give the Department of Labor explicit authority to get compensation information from 401(k) service providers and recover plan losses from providers that are not ERISA fiduciaries.
“We continue to believe that changes to ERISA would help (the U.S. Department of) Labor in its efforts to promote sponsors’ fiduciary oversight and be in the best interest of participants,” according to the GAO report, which came as the result of an investigation requested by House Education and Labor Committee Chairman George Miller, D-Calif.
“Some (plan sponsors), particularly those with small plans, may have limited time, specialization, knowledge and ability to negotiate about service providers or investment funds,” according to the report. “Absent a greater understanding of how sharing plan functions with their service providers or delegating functions to them may lead to confusion about fiduciary roles, some sponsors are likely to remain vulnerable to advisers or other providers whose compensation and affiliation may promote interests besides those of the plan, such as higher plan fees.”
