Review trustee or committee minutes, plus any other documentation, of the original purchase and the continued holding of plan investments.  Remember, fiduciaries have a continuing duty to monitor plan investments and service providers.

Perform a performance review of your investment options to see they are in line with their peer group and the appropriate indices or benchmarks for return, risk and expenses.  Even better, hire an independent investment advisor who is not compensated by any of the investments in the plan to provide such a review.  This will provide an additional shield from fiduciary liability.

Determine if your plan complies with the DOL section 404(c) Regulations so the participants are responsible for their own investment decisions, not you as a fiduciary.  Many of our clients did not realize they were not 404(c) compliant.

If you have an investment policy statement, make sure that you are following it.  If you don’t have one, why not?  Your IPS should specify how to select investments and when to get out of them.  It is every bit as important to have an exit strategy for plan investments as an acquisition strategy!

Make sure you know who the plan fiduciaries are and refresh their understanding of their responsibilities and liabilities.

Review the plan/trust documents and summary plan description to verify that you are operating the plan in accordance with the plan documents and there are no inconsistencies among the documents.

Identify how the mutual fund companies associated with your plan handle market timing and late trading issues.   Many funds have published this information on their websites.  Otherwise, you may need to request the information in writing.

If you have mutual funds in your 401(k) plan involved in the current scandal: (1) furnish information to the participants about what you know about the allegations and (2) remind participants that they have the right to change their investments and that they are responsible for their investment decisions.  (3) If you feel that the funds are no longer suitable options, freeze them or map the participant accounts to new funds with similar characteristics.

If you have already departed one of the mutual funds (for example, Janus or Putnam) that are negotiating settlements, be vocal about being included in the distribution.  Some funds are considering returning the settlement to the fund itself, which will only benefit shareholders of that day.  Encourage your record keeper to be your advocate since they are more likely to have an ongoing relationship with the mutual fund company.

The concurrent, but unrelated, developing mutual fund story is fees. Most institutional mutual fund companies have multiple classes of funds, which enables one to buy the class matching your service needs.  As you know, the bells & whistles—web site, phone support, record keeping, employee educational materials, are not free.  They are typically subsidized by the mutual fund.  Ask each provider, agent, broker, record keeper, or TPA what they are receiving in the form of fees, commissions, products or services from anyone because of their relationship with your plan.