An interesting article has raised the issue whether pension plan sponsors and administrators breach their fiduciary duties to plan participants by paying investment fees for actively managed plans. As summarized by Dan Solin: The vast majority of 401(k) plans are populated with actively managed funds, where the fund manager attempts to beat a designated benchmark, like the S&P 500 index. These funds are included as investment options based on advice of brokers, registered investment advisors or insurance companies responsible for advising the plan sponsor. A recent article by Charles D. Ellis questions this practice and raises issues that have been troubling me for a long time. The article is titled: Murder on the Orient Express: The Mystery of Underperformance. For more on this see http://www.huffingtonpost.com/dan-solin/401k-underperformance_b_1656129.html.
