Check the headlines of many news and industry trade publications lately, and there is a lot of buzz about fiduciary responsibility as it relates to retirement plan participants. While acting in the best interest of participants is an ongoing commitment for plan sponsors, it never hurts to make sure they're honoring it.
Taking a big step back and looking holistically at risk is a good place to start. It's important to assess and prepare for a range of potential investment risks, rather than focusing only on what the prevailing market brings to bear. It's easy to get myopic when a particular risk is front and center. In the present environment of ultra-low interest rates which will no doubt head back up at some point, interest rate risk is certainly top of mind.
But there are many other investment risks lurking — whether driven by geopolitical concerns, liquidity issues or currency fluctuations. What plan sponsors want to avoid is getting caught off guard by risks that they don't see coming. That type of surprise could inadvertently jeopardize their participants' retirement outcomes and call into question whether the plan sponsors are fulfilling their fiduciary responsibilities.