by Seth Fineberg
New York — As part of its ongoing financial literacy efforts, the American Institute of CPAs recently partnered with the Department of Labor in a national campaign to educate employers and service providers about their fiduciary responsibilities under the Employee Retirement Income Security Act.
“Nothing can be more important than educating fiduciaries in their critical responsibility in the protection of employee benefit plans,” said AICPA president and chief executive Barry Melancon. “Many of our CPA members, including CPA/PFS credential holders, serve as trusted advisors to the small business owner and provide advice to investment committees of public and private companies. Critical to the proper delivery of these services is guidance on prudent investment practices.”
The institute’s ERISA effort could also open opportunities for holders of its Personal Financial Specialist credential.
PFS holders like Dennis Kroner, president of Chicago-based Pitt Ryan Linnear, believe that he and his fellow credential holders could do a lot of good in the AICPA’s financial literacy efforts, particularly with what it is doing with the DOL in educating employers and service providers about their fiduciary responsibilities.
“I’m so passionate about this, and we are trying to get more PFS holders involved with educating about pensions and 401(k)s and other small business plan sponsor issues,” Kroner said. “We want PFSers to begin to offer services where they can examine some issues with plan providers, measuring performance correctly, and how mutual funds are selected. There are so many questions to be asked and CPA/PFSers are the ones to help answer them.”
As part of its relationship with the DOL, the AICPA agreed to participate in a series of DOL seminars that will run from June until late September, designed to educate small business plan sponsors and other fiduciaries on their obligations.
Other partners involved include the National Federation of Independent Business, the U.S. Chamber of Commerce, the Society for Human Resource Management, and the U.S. Small Business Administration.
In May, the institute also formally announced that it is working in conjunction with state CPA societies nationwide to roll out its 360 Degrees of Financial Literacy campaign, aimed at educating Americans about the basics of financial planning. One part of this effort is a grassroots mobilization team led by Alabama CPA Jimmy Williamson to facilitate volunteerism. The mobilization team kicked off its efforts in California, Michigan, New Jersey, Ohio and Missouri, which already have financial literacy programs in place.
Phyllis Bernstein, a PFS holder and consultant, is also supportive of the AICPA’s efforts with the DOL, as she explained that, all too often, small pension plan clients do not know enough about the plans they are entering due to their lack of proper financial education.
“I have a small pension plan client and the brokers are just trying to make the client ‘broker.’ They are good salespeople, but I see firsthand that retirement education is needed, especially as our population marches toward retirement armed with hopefully a 401(k) and maybe some meager Social Security,” Bernstein said. “This [the DOL partnership] is really a great feather in the AICPA’s cap and it appears to be a direct result of its review and work on the fiduciary handbook.”
Go to the experts
Last year Labor approached the AICPA after reading that handbook, titled “Prudent Investment Practices: A Handbook for Investment Fiduciaries,” a collaboration between the institute and the Foundation for Fiduciary Studies. The DOL recognized that it could do more to educate the public with the aid of the AICPA, said Anat Kendal, the institute’s director of financial planning.
“They came to us given our history in this particular arena and asked us to participate in a series of programs to educate small business owners on their fiduciary responsibilities,” Kendal explained. “The DOL not only reached out to us because of our knowledge and work on the handbook, but also recognized that the CPA is the individual most often turned to by the small business owners to implement these plans.”
As part of its plans, the AICPA will be specifically involved with the DOL and the Arizona Society of CPAs in a September 28 seminar open to the small business community. The Phoenix-based seminar will emphasize the obligation of plan sponsors and other fiduciaries. Prior to the Phoenix event, the DOL is also hosting other seminars throughout the summer in Miami; Columbus, Ohio; and Burlington, Mass.
The AICPA plans to evaluate its efforts with the DOL in the fall to further explore its relationship and plans, according to Janice Maiman, the AICPA’s vice president of strategic and member communications, who has been involved with the institute’s financial literacy efforts. She also believes that PFS holders, and CPAs in general, have the most important role to play.
“This is something that crosses all member segments. Since launching our programs we have been filtering offers, facilitating things at the grassroots level on a regular basis,” Maiman said. “CPAs have knowledge in a wide range of financial literacy elements. PFS holders and financial planners have been dealing with these issues regularly and continue to be the focal point going forward.”
