25.01.2020 05.01 GMT+0000
In selecting new providers and reducing plan costs, fiduciaries need to be alert to the conduct of deselected providers.
Terminated Providers May Represent a Special Fiduciary Challenge.
Scrutiny of plan fees may create situations where an incumbent plan provider can make more by losing a highly competitive bid for an employer-sponsored plan -- and then actively “harvesting” accounts and assets from that plan--than by retaining that plan. And, once deselected, the provider-- and individual representatives employed by that provider--may have a strong economic incentive to encourage participants to move assets out of the employer-sponsored retirement plan and into the retail products of the (deselected) provider.