Whether it’s a movie or something in real life, we’ve seen people who are left holding the bag for something they really had no control over. We call that person, a patsy, which is a dupe or a scapegoat for nefarious activity. The problem of being a plan sponsor is that while they might be the patsy for something wrong committed by a plan provider, they are still on the hook for liability for hiring these poor plan providers and they have the fiduciary duty to make sure the plan is in compliance. The best way for plan sponsors to avoid being a patsy is understanding their role in being a plan sponsor and understanding some of the topics of this article.
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