Kohl may expand fiduciary tag in retirement market

The Senate Special Committee on Aging is considering proposing legislation that would require all managers of qualified default investment alternatives to act as fiduciaries under ERISA. Sen. Herb Kohl, D-WI., chairman of the committee, said last month that he is planning to propose legislation to mandate that managers of target date fund funds — which are one type of QDIA — take on fiduciary responsibility under the Employee Retirement Income Security Act of 1974. But he is considering expanding the legislation to include all QDIAs, according to an aid, who asked not to be identified. Such legislation would mean that all QDIA managers, including target risk managers, balanced-fund managers and target date fund managers, would be held to a heightened fiduciary duty — and thus would have to take into account the needs of the plan participants when managing their funds. Currently, the only QDIA managers that are required to act as fiduciaries under ERISA are managed accounts. The committee is looking into the issue and weighing the pros and cons of such a proposal, the aid said. It hopes to introduce some form of legislation on the issue by the end of February.