New Fiduciary Advisory Service Established

Steven Parmelee: fournder and president of Westport Benefits Group.  Contributed photoA new Westport-based fiduciary advisory service, Westport Benefits Group, has been established to meet what organizers say is a growing need for fiduciary responsibility in the retirement plan marketplace.

As 401(k) plan trustees begin to recognize that they are personally liable for their actions on behalf of the plan, many are scrambling to make sure they are in compliance, according to a press release announcing the service.

It cited the case earlier this year of Enrons former human resources head, Cindy Olson, who it said was found personally liable for breach of fiduciary responsibility and fined $100,000, which was not covered by errors and omissions insurance.

Although few plan sponsors share EnronҒs particular circumstances, most are considering this a wake-up call, the announcement said.

Trustees are responsible for knowing if their fund manager, broker, or consultant is involved with pay-to-play schemesӔ said Westporter Steven Parmelee, founder and president of WBG.

He said that bundled plans are now being asked to break out their fee structures and justify the inclusion/exclusion of certain funds.”

Plans that offer ӓfree recordkeeping or other services should be examined closely, and non-disclosed subsidies for administration need to be identified and recognized, according to Parmelee.

ԓMany Trustees are unaware of the true cost of their program, he said.

The term ԓfiduciary is inclusive of more than five million people who have the legal responsibility for managing someone elseԒs money, including members of investment committees of retirement plans, foundations and endowments; trustees of private trusts; and investment advisors, the announcement said.

The size of the marketplace and the lack of trained fiduciary consultants put Westport Benefits Group in the forefront as a one stop source for fiduciary advice and education,Ӕ Parmelee said.

The level of scrutiny from regulators is increasing dramatically, and plan participants are much more aware than just a few years ago. These issues are not going to go awayӔ.

Parmelee has spent his entire career in the retirement business, gaining experience in the sales, marketing, and servicing of qualified plans.

A graduate of the University of Connecticut, he holds an Accredited Investment Fiduciary Auditor designation from the Center for Fiduciary Studies in association with the University of Pittsburghs Joseph M Katz Graduate School of Business.

He is a member of the Westport/Weston Chamber of Commerce, the Worldwide Employee Benefits Network, and is an instructor and speaker on fiduciary issues.

Information on the Center for Fiduciary Studies can be found at www.cfstudies.com.