Reader Responses August 7, 2017

SURVEY SAYS: Importance of Employer Reputation

We covered a survey that found 71% of U.S. workers say they would not apply to a company experiencing negative press; however, only 6% of workers have left a company due to negative press.
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Last week, I asked NewsDash readers, “Would you leave your company if it was experiencing negative press, and how important is your firm’s reputation to your job satisfaction?”

The majority (78.6%) of responding readers work in a plan sponsor role, 14.3% are TPAs/recordkeepers/investment managers, 3.6% are advisers/consultants and 3.6% are attorneys.

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Only 3.4% of respondents said they would leave their company if it was experiencing negative press, while 17.2% said they would not and 79.3% said it depends on how bad the situation is.

Half indicated their company’s reputation is somewhat important to their job satisfaction, and 40% reported it is very important. Only 6.7% said their company’s reputation is not very important to their job satisfaction, and 3.3% indicated it is not at all important.

In verbatim comments, the major theme was that not all press can be believed. Some folks placed conditions on what kind of press would give them second thoughts about their jobs. Editor’s Choice goes to the reader who said: “Often, what the press says isn’t the full story.” 

A big thank you to all who participated in the survey!

Verbatim

Jobs are sometimes hard to come by so I wouldn't just outright quit, but I would begin a job search.

While I place a strong value on a company's reputation, I also have a strong skepticism about negative press and accusations. I've read stories with half-truths or outright lies on many different topics that are slanted to promote an agenda rather than having journalistic integrity. The press has a bad reputation, too.

An old boss of mine once wisely commented that when you lie down with dogs, you can expect to get fleas. That's true of all human relationships, customers, and yes - employers.

I would like to think it would be important for me to stay to help the company through a difficult situation. However, if the owners did something unethical, immoral or severely unsafe I would have a hard time staying.

You need to be diligent about understanding the facts and deciphering the press.

I hesitate to judge a company (or person) based on negative or even positive press. I've seen situations where the press has horribly misrepresented a situation so although anything I hear may be a piece of what forms my opinion, it would be the only piece.

Regardless of negative press or a change in company reputation, employees deserve to have their pension assets looked after. I'd be concerned, but unlikely to leave.

The reason for the negative press, and whether I agree with it or not, is critical in making the decision to stay or go.

It would depend upon why the negative press. The press is pretty good about bashing anyone and anything for next to nothing.

I thought all press was good press?

Verbatim (cont.)

Often, what the press says isn't the full story.

The decision to leave would depend on what the bad press was about. Was it because the company manipulated the market or was it because the CEO used their expense account for a shoe fetish while the company was going broke? I can handle the fetish thing but not market manipulation.

I've worked for big pharma and big retailing, both of which have received loads of negative publicity. As long as your job isn't directly involved in the negative publicity, you're usually fine.

An organization's reputation reflects the collective reputations of its employees.

It's important to work for an ethical company that I can feel proud of and recommend to others. Why spend such a large amount of your time working for a company you don't believe in?

This is an everyday struggle, because so many of my co-workers are idiots.

It depends on the nature of the situation. If it were illegal or nefarious activities and I knew that to be true, I would probably leave or already be gone by the time it hit the press. If I knew the allegations to be untrue, I would have to think about that.

Most problems can be fixed. Time heals. If it weren't negative, the press wouldn't report on it.

Long-term prospects of a bad reputation signal a change coming soon. Layoffs, sale, name change or the most unlikely the company does the right thing. All could impact employment, compensation and the next position.

Negative press is not always honest press. If I was working on I would know from an insider’s view if that press was true. I also may be the one who could change it if I felt it was wrong.

NOTE: Responses reflect the opinions of individual readers and not necessarily the stance of Strategic Insight or its affiliates.
Compliance August 4, 2017

DOL Fiduciary Rule FAQ Further Clarifies Compliance Demands

In general, if a covered service provider will continue after the fiduciary rule to provide services only in a non-fiduciary capacity, or has already effectively disclosed investment advice fiduciary status, no additional disclosure would be required under the 408b(2) regulation.

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The U.S. Department of Labor (DOL) released a second frequently asked questions document explaining how advisers and plan providers can maintain compliance during the fiduciary rule’s lengthy implementation process.

Matters addressed in this latest FAQ include information “on (1) fiduciary status disclosure issues under the Department of Labor’s ERISA section 408(b)(2) service provider disclosure regulation that applies to ERISA pension plans; (2) whether recommendations to plan participants and individual retirement account (IRA) owners to contribute to or increase contributions to a plan or IRA constitute fiduciary investment advice under the fiduciary rule; and (3) whether recommendations to employers and other plan fiduciaries on plan design changes intended to increase plan participation and contribution rates constitute fiduciary investment advice under the fiduciary rule.”

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Concerning the first question, DOL suggests that among other disclosures required under the department’s 408b(2) regulation, if a service provider under a contract or arrangement with an ERISA pension plan reasonably expects that the service provider, an affiliate or a subcontractor will provide services as a fiduciary within the meaning of ERISA section 3(21), the service provider generally has an obligation to disclose to an appropriate plan fiduciary that services will be rendered in a fiduciary capacity.

“In general, if a covered service provider will continue after the fiduciary rule to provide services only in a non-fiduciary capacity, or has already effectively disclosed investment advice fiduciary status, no additional disclosure would be required under the 408b(2) regulation,” DOL says.

The explanation continues: “In the case of a non-fiduciary service provider to an ERISA pension plan that has structured its service contract or arrangement so that it reasonably and in good faith believes that it will not be providing services to the plan that would make it an investment advice fiduciary under the fiduciary rule, the service provider would not be required to disclose investment advice fiduciary status under the 408b(2) regulation. The Department’s conclusion in this regard would not be affected by the fact that it is possible that actions of individual agents, representatives or employees involved in implementing a service contract or arrangement (e.g., call center employees) may exceed, in individual circumstances, contract limits that may result in communications that constitute investment recommendations covered by the fiduciary rule.”

The text of the FAQ document goes into significantly more depth regarding these circumstances.

NEXT: Additional clarifications

Per item two—whether recommendations to plan participants and IRA owners to contribute to or increase contributions to a plan or IRA constitute fiduciary investment advice under the fiduciary rule—DOL says generally the answer is “No.”

“The fiduciary rule generally does not treat communications ‘about the benefits of plan or IRA participation, [and] the benefits of increasing plan or IRA contributions’ as fiduciary investment advice, provided that the information and materials do not include recommendations with respect to specific investment products or recommendations with respect to investment management of a particular security or other investment property,” the FAQ reads. The document also provides illustrative examples of such communications that would not constitute fiduciary investment advice under the fiduciary rule.

Finally, on the third matter—whether it would it be investment advice under the fiduciary rule if a person makes recommendations or suggestions to a plan administrator or other plan fiduciary relating to methods to increase employees’ participation in, or level of contributions to, an ERISA plan—DOL again says this is not the case.

“Provided that the information and materials do not include recommendations with respect to specific investment products or recommendations with respect to investment management of a particular security or other investment property, the department would not view such communications as investment advice recommendations within the meaning of the fiduciary rule even in cases in which the recommendation is based on specific attributes of the plan or its demographics, such as correlations between participation or contribution rates and specific participant attributes.”

The full FAQ is available for download here. 

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