Effective January 1, 2007, the Pension Protection Act permits retirement plan service providers and fiduciary advisers to recommend investment choices to plan participants based on specific individual needs, goals and risk tolerance levels.

To qualify, this investment advice arrangement must either:

• Provide that the fees received by the fiduciary adviser do not vary on the basis
  of which investment options are chosen; or
• Use a computer model under an investment advice program meeting certain conditions.

The plan sponsor will still be responsible for the prudent selection and periodic monitoring of the fiduciary adviser. This does not entail monitoring the specific advice to participants given by the fiduciary adviser.

A good example to consider that we see today is the danger of participants overweighting their exposure or investing in one aggressive sector like emerging markets. In most cases the selection by the participant was based on the recent past performance. We strongly advise against choosing an investment solely on past performance.

It is important for plan fiduciaries to remember that not making a decision is actually a fiduciary decision. If fiduciaries know or suspect that their participants need help, responsibility is not avoided by not making a decision. Fiduciaries can’t just ignore issues and decision points. Fiduciaries need to perform due diligence and decide what is in the best interest of participants and act.

We offer expert advice within the qualified company retirement plans that we manage to benefit all of the plan participants as part of our service to the plan sponsor. We believe that this advice is extremely valuable and necessary for each participant to help them reach their retirement goals. If you are looking for advice on your existing company retirement plan please contact your Fragasso Financial Advisor.

Please contact me directly at 412-227-3211 to learn more about how we can help your company with the management and fiduciary responsibility of its retirement plan.

This article is for informational purposes only and not intended as financial advice. Consult your financial advisor to determine what is appropriate for your situation.
Past performance is no guarantee of future results.

If you have any comments, questions or suggestions concerning this electronic newsletter, please email us at fgi@fragassoadvisors.com.

Click here if you do not want to continue receiving Fragasso Financial Advisors eNews.

Visit Our Web site:
www.fragassoadvisors.com

A REGISTERED INVESTMENT ADVISOR
The Retirement Planning and Wealth Preservation Specialists Since 1972
610 Smithfield Street, Suite 400, Pittsburgh, PA 15222

Phone 412.227.3200, Fax 412.227.3210, Toll Free 1.800.900.4492
Fee-based investment management and securities offered through LPL Financial
Member FINRA/SIPC

©2007 The Fragasso Group, Inc., All Rights Reserved