The departure of arguably the leading fixed income investment manager of all time from the company he founded has a lot of sponsors and plan fiduciaries reconsidering their current fixed income fund commitments. And, not surprisingly, they are getting "ambulance chaser" calls from competitors, urging them to change.
For defined benefit plans, the choice whether to stay or move—may be relatively straightforward. The process is more awkward for defined contribution plans that have included a brand name, superstar-managed fund in the plan fund menu. And the process of switching out funds may be particularly cumbersome for plan fiduciaries.
This paper examines what is gained by having a brand name fund in the 401(k) fund menu.