A Part of IRM: Fiduciary Risk

By Jamie Collier & Jim Plaster

Condition – Member’s Fiduciary Exposures:Lack of monitoring Investment

PerformanceLack of monitoring fees charged

to participantsLack of competitive analysis and

procurement in record keeping services

Administrative & Record Keeper services ignored or left on “auto pilot”

Etc.

Coverage:

WSTIP’s SIR LayerGEM Layer – reportedly not coveredExcess Layer - ??

Initiative: (Reduce Exposure to Pool)Exclude coverage in SIR (leave all

members bare)Continue coverage in SIRSeek additional coverage in GEM &

other excess layersImprove loss avoidance

Establish a pooled resource for monitoring investment performance, fees, competitive analysis and procurement of record keeper services, etc.

Initiative (continued):

It is possible to efficiently and effectively accommodate many individual plans in a pooled environment for reduction of risk

Recommendations:

Treat Fiduciary Exposures as any other exposures for members under our IRM philosophy

Pursue a common understanding that our pool desires to provide broad coverage (rather than narrow) of all liability risks our members have responsibility for.

Recommendations (continued):

Improve our loss avoidance assets and tools for Fiduciary Exposures thru an efficient & effective process. (A pooled resource for monitoring employee benefit funds investment performance, fees, competitive analysis & procurement of record keeper services, etc.)