Independent Fiduciaries Formalize Profession with Creation of the "ERISA Fiduciary Guild"
With an abundance of humility and a dash of trepidation, the men founding the EFG are off on a challenging mission to do nothing less than alter the course of an errant industry, steering away from the abyss ahead spelling a social disaster. In the spirit of the sentiments of moral virtue taught by Adam Smith (well before he explained the wealth of nations), our success will assure that our countrymen will indeed be afforded a reasonable opportunity to retire in dignity. The ERISA Fiduciary Guild will be a mid-wife in attendance at the re-birth of a fragile new infant - that is, at the re-birth of a too often forgotten fiduciary duty to honor, protect, guide and serve ERISA Plan participants and beneficiaries by putting their interests behind no other.
What is the ERISA Fiduciary Guild?
The ERISA Fiduciary Guild is non-profit organization whose membership consists of skilled, experienced and dedicated independent fiduciaries called Master Pension Fiduciaries™ (MPF™) and independent fiduciaries in training called Apprentice Pension Fiduciaries™ (APF™). The EFG ensures qualifications for membership are met and maintained, that the character of its members is beyond reproach, and that the work product of each member is reviewed by other members on a consistent basis. Plan sponsors can look exclusively to EFG members as their sole source for fiduciary services, and can be absolutely certain they will benefit from the highest level of skill, talent and expertise.
What specific problem is the ERISA Fiduciary Guild (EFG) trying to address?
The Department of Labor has recently forced hundreds of named fiduciaries to step down and be replaced by independent fiduciaries because of these problems. With the EFG, the Department of Labor and plan sponsors will now have an obvious place to go for qualified, professional, independent fiduciaries.
An EFG Master Pension Fiduciary™ will work to protect plan sponsors, plan participants and plan beneficiaries from spin, slick sales techniques, hidden agendas, hidden fees and other self serving tactics that currently dominate the market place.
Who will benefit from the ERISA Fiduciary Guild and why?
Members of the independent EFG themselves will benefit by the standards they are required to live by, and the camaraderie and peer reviews afforded by EFG membership. More importantly however, is the value and benefit the participants themselves will receive from the increased level of knowledge, understanding, responsibility, and integrity an independent fiduciary can bring to their plan. Plan sponsors who hire an EFG Master Pension Fiduciary™ provide the highest level of expertise and value to the participants and beneficiaries of their plan.
Once Plan sponsors understand the benefits of transferring primary responsibility for a plan to a professional fiduciary, they will want to seek out the best solution to meet this task which only the EFG will be able to deliver. Those serving as professional fiduciaries will benefit from being involved with the EFG by having the help and resources to define best practices and overall standards of care which will establish the cornerstone of this emerging profession.
Who's behind this group and what is its agenda?
The EFG was launched in late 2004 by three highly skilled, completely independent, and widely known independent fiduciaries - Brooks Hamilton, Steve Lansing and Matthew D. Hutcheson. The EFG is a significant and ground-breaking attempt to assure the accountability of individuals who hold themselves out as fiduciaries to qualified retirement plans. The Guild will provide high levels of education, camaraderie and responsibility that will restore confidence in retirement plan decision-making. Retirement plan sponsors, participants and beneficiaries just entered a new age of fiduciary professionalism.
What is a Master Pension Fiduciary™?
Master member status denotes the highest possible standing membership within the Guild. Master Pension Fiduciary™ membership is earned only after an applicant has demonstrated comprehensive knowledge about all the material aspects of managing a retirement plan. Master Pension Fiduciary™ status is the standard a plan sponsor can use to be certain they are working with experienced, knowledgeable and conflict free professionals.
Define a Master Pension Fiduciary™
A Master Pension Fiduciary™ is a decision making presence who independently presides over the operation of a qualified retirement plan and its fiduciary boards/committees. A Master is a named fiduciary with the knowledge and skill necessary to possess full discretion over a plan, and the ability to use that discretion with wisdom and prudence. A Master hires/fires, or authorizes the hiring/firing of, service providers such as investment advisors, consultants, record keepers, actuaries, custodians, fund managers, etc. Master Pension fiduciaries protect participants by managing processes and exercising sound judgment, which translates into lower costs, lower risk and higher, more efficient performance. Master Pension Fiduciaries fill a most important roll: to "Protect, Guide and Serve" the participants and the beneficiaries within the plans in which they preside. Officers, directors and shareholders receive the ancillary benefits of knowing these sacred responsibilities have been delegated to honorable and capable professionals, and that operational "unknowns" that cause chronic worry in some executives is not a worry for them. It is true that "no man can serve two masters," and the appointment of an independent Master Pension Fiduciary™ ensures that "no one has to."
Why would a plan sponsor want a Master Pension Fiduciary™ involved with their plan?
A plan sponsor who understands the value of appointing an independent fiduciary will want to appoint one who is a member of the guild. Guild membership requires more than just knowledge. It requires credentials, experience and personal integrity. Informed plan sponsors can be certain they are retaining independent fiduciaries who are not only objective and free of hidden financial agendas, but those known to be professional, adhering to impeccable ethics and following diligent practice models. Plan sponsors will know that the professional standards required of a Master Pension Fiduciary™ will be perpetually upgraded and monitored by the EFG, including annual peer reviews to continue standing as a Master Pension Fiduciary™.
Plan sponsors are concerned about the increasing number of class action lawsuits being filed against employers and plan fiduciaries. How does the EFG help them reduce the chance that one will be filed against their company?
A careful analysis of lawsuits indicates that a primary wrong alleged by class plaintiffs is "breach of fiduciary duty." A key element of this core allegation is a "conflict of interest" inherent in the dual role played by "executive-fiduciaries" being forced to serve two masters. Using an EFG Master Pension Fiduciary™ circumvents this dual role.
Also, it is common knowledge that fiduciary responsibility is best demonstrated by following a professional process and procedure in plan governance. The EFG will establish the professional benchmark for defining the institutional process that all fiduciaries will want to emulate.
Why would "practitioners" be interested in the EFG? How will it help them build their business and/or enhance their practice?
Independent fiduciary practitioners currently have no professional organization with which they can associate. Practitioners who meet all of the criteria, including passing the fiduciary boards, will join an elite group of pension fiduciaries who have likewise demonstrated this highest level of competence and independence. Plan sponsors will look to EFG members as their sole source of retirement plan guidance. This will place the EFG Master Pension Fiduciary™ in a position of preference and control over others who would serve to consult or counsel with a plan sponsor or plan committee.
Why is Master Pension Fiduciary™ unique?
The Master Pension Fiduciary™ is unique in that they must be totally independent in every way. They may not receive compensation from any source except from the plan or the plan sponsor - and all compensation is paid by invoice. Relationships with funds, financial institutions, and similar entities for payment purposes are expressly prohibited. Master Pension Fiduciaries are highly skilled and credentialed professionals who must have a graduate degree or its equivalent, and sit for and pass the full day "fiduciary boards." But more importantly, Master Pension Fiduciaries are not service providers. Rather, they are "the" independent fiduciary decision maker(s) with respect to a plan. They have discretionary authority over all plan operations, including investments and recordkeeping. They discharge their duties with precision and in accordance with both the exclusive benefit rule and prudent investor rule. They are hired to protect, guide and serve the plan participants and beneficiaries whom they represent. As fiduciary responsibility mandates the highest duty defined in our law, it follows that an independent fiduciary profession is the highest profession known to an enlightened people. The EFG provides the framework and controls for its members. EFG membership is the professional pinnacle for the independent fiduciary, and the EFG will keep watch over all members by means of stringent cannons of ethics, sound grievance procedure, and a code of moral virtue.
How does someone recognize a Master Pension Fiduciary™?
Most Master Pension Fiduciaries will have the EFG seal on their business cards and letterhead. But the best way to identify an MPF will be to ask the question, "Are you a Master member of the ERISA Fiduciary Guild?" The answer to this question will say everything.
The triumph of the EFG in achieving its noble purpose will not occur overnight, for trust and honor are earned, not demanded. Accomplishing absolute perfection, per se, will not be an objective of the Guild - however, striving for perfection will be a requirement!
Quotes and Comments
"The retirement plan arena is in desperate need of true professional standards that fiduciaries can use to control their affairs. Moreover, the retirement community needs true objective, independent counsel they can employ to assist with managing their plans. The ERISA Fiduciary Guild is a significant step towards professionalizing a service area that is rampant with conflicts."
Edward Siedle, JD
Center for Investment Management Investigations
Benchmark Companies
"All that is necessary for the triumph of evil is that good men do nothing." (Edmund Burke)
"Men who profess to be good always seem to clearly outnumber men who are 'morally corrupt and do wrong' yet those who are 'morally corrupt and do wrong' seem to prevail far too often. Why is that? Why is it that when good men do nothing, nothing good seems ever to get done?
"Another lesson from history: an ultimate outcome may be determined by whether good men are willing to stand up and fight for what they know to be right. Accordingly, I have decided to join with Steve Lansing and Matt Hutcheson in launching the ERISA Fiduciary Guild which is dedicated to a simple proposition: i.e., honorable men of conviction are willing to stand up and fight for what they know to be right. And the mantra such men sing, comforted by the foreknowledge that HELP IS ON THE WAY, is summed up in these lyrics from an old Oscar Hammerstein song (Stout Hearted Men):
"Give me some men who are stout-hearted men who will fight for the right they adore Start me with ten who are stout-hearted men and I'll soon give you ten thousand more!
"While the EFG will start its journey with just a few good men, these men are energized by the foreknowledge that an army of good men are on the way!"
Brooks Hamilton, JD
Master Pension Fiduciary™
Director/President EFG
"I saw a glaring need for a truly independent, professional resource to help practitioners understand and use proper practices and standards of care in serving fiduciaries. There is an even greater calling for a conflict free organization to educate fiduciaries about their responsibilities and help them identify appropriate parties to whom they can transfer fiduciary risk and responsibility. The Guild marks the dawning of a new profession."
Stephen J. Lansing, CIMC, CEBS
Master Pension Fiduciary™
Director/Vice President EFG
"Master Pension Fiduciaries™ are unique. They not only teach plan sponsors how their plan should be operated, they actually do it. They put their money where their mouths are, courageously acting as independent fiduciaries for qualified retirement plans. Plan sponsors need only ask one question of their service providers, 'are you a Master member of the ERISA Fiduciary Guild?' An answer in the affirmative says everything."
Matthew D. Hutcheson, MS, CPC, AIFA™, CRC
Master Pension Fiduciary™
Director/Secretary Treasurer EFG
"The EFG is a significant and ground-breaking attempt to assure the accountability of individuals who hold themselves out as fiduciaries to qualified retirement plans. The Guild will provide high levels of education, camaraderie and responsibility that will restore confidence in retirement plan decision-making. Qualified retirement plan sponsors, participants and beneficiaries just entered a new age of fiduciary professionalism."
Jay Richardson, JD, CPA, CMA, CFM
EFG Legal Counsel
"There is a great need in the employee benefit industry for qualified professionals to admin benefit plans, and to protect the retirement benefits of participants and beneficiaries. The EFG will help to fulfill these important needs."
Len Garofolo, MPA
Master Pension Fiduciary™
erisaconsultingroup.com
More Information
The EFG's website is: www.fiduciaryguild.org .
###
This is a press release provided by the company or its representatives. 401khelpcenter.com, LLC is not the author of this release and is not associated or affiliated with any firm or organization mentioned unless otherwise noted. Use of any information obtained from this release is voluntary, and reliance on it should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. Reference to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favoring by 401khelpcenter.com, LLC.
