Fiduciary Guidance

The Pension Protection Act (PPA) is having a profound impact on the corporate retirement industry. While ERISA requires qualified pension plans to be managed to the exclusive benefit of the plan participants, the PPA also requires annual audits of "eligible investment advice arrangements" and all plan related expenses, including the investments. If the plan sponsor notes that aspects of a plan are not benefiting plan participants, the plan sponsor has an active duty to make changes.

Plan sponsors are evaluated based on the prevailing circumstances at the time the decisions were made. Meeting these fiduciary responsibilities can be a complex process and one that is particularly difficult to navigate for plan sponsors. A defined and consistently applied methodology is essential to provide satisfactory fiduciary oversight and removing most, if not all, subjectivity and risk from the equation.

This includes developing and adhering to a formal Investment Policy Statement and establishing clear criteria for selecting and monitoring investment managers. The IPS is a due diligence procedure for selecting investment options and must consistently be applied. Without it, it is nearly impossible for a fiduciary to support its actions in investment monitoring and replacement.

However, having an IPS alone is not enough. Many committees and consultants may have an IPS but often violate its parameters. Not adhering to an IPS in most cases is more of a breach than not having one at all. 

The regulations governing the management of retirement plans have changed, and so too should your decisions.

By continually and regularly monitoring the plan using this methodology, decisions are evaluated and changed according to the evolving market landscape and prevailing circumstances. This protects the interests of the plan sponsor and the plan participants.

The PPA provides the amendments and changes to ERISA that are necessary to encourage plan sponsors to retain qualified fiduciary advisers and to define safe harbor procedures to insulate plan sponsors from the liability associated with the advice.

Delta Capital Management is a retirement plan specialist that provides investment advice with fiduciary processes based on the highest standard of the law – the fiduciary standard. Our role is helping minimize your fiduciary risk by providing the processes and procedures that guide your decisions and help the plan sponsor meet their fiduciary obligations. This includes developing an Investment Policy Statement for our clients and monitoring it quarterly and at each committee meeting.

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Through client-specific financial analysis and independent and proprietary investment research, our services are designed to secure your well being for the long-term. As your investment professional, we are committed to delivering performance in a manner that is consistent with your needs, goals and desires. Headquartered in Orlando Florida, Delta Capital Management serves clients globally.