The law is challenging to navigate when it comes to pension management, but why shifting towards leadership allows businesses to leverage the law in a positive way.
Rational choice theory shows us that every business leader will think through many different options before deciding on a best course of action, which will either increase their company’s success or reduce extant risks. This rational choice can either be focused on short term or long term goals, but the end result is that people will choose to help themselves in whatever way seems the most rational. A court’s job is to look deeply at those instances in which people act irrationally on behalf of their businesses, and when others accuse them of doing so. That is why the law is likely to be unevenly applied in not only pension management but in all business challenges.
In our new paper on leveraging the law for pension management in 2019, we look at how you can develop your own sustainable pension plans, relying on your own ideals and values, so that you don’t have to lean on the law (and expensive law firms) to make your business and your pension thrive. Managers, as agents of the shareholders in a company, have a fiduciary duty to use corporate resources to profit maximize. There are flaws in this, however, from a legal point of view as both employees and communities have an arguably larger ‘investment’ in the firm even if it is an indirect or non-financial one.
How will you navigate these challenges from a legal point of view in the years to come? Even though the law is changing to give pensions more flexibility, in terms of where they are housed to promote sustainable pension design for both employers and employees over the long term, pension plans need critical thinking before implementation.
At Marris Miller, we know that as agents of the company, managers have wide discretion to pursue a range of options available to them. Acting in the best interests of plan members is a complex challenge, but we will help your team find out the best next steps forward.