A conversation with a top ERISA lawyer and two Russell Investments experts
Don’t fall into the trap of thinking all-passive management is the "safe fiduciary option." The move to passive investing is gaining traction among defined contribution (DC) plan sponsors. However, this may be based on the false premise that it can reduce fiduciary risk and due diligence requirements and obligations. DC plan sponsors are still faced with several active decisions when they implement passive investments. As a result, meaningful due diligence requirements remain.
This paper discusses the responsibility for selecting and monitoring passive managers, as this can be just as extensive as for selecting any active or active/passive provider.