Last week, the elementary schools in Attleboro, Massachusetts, gained a bit of notoriety for their decision to ban kids from playing tag (more specifically, any unsupervised “chase” game). They weren’t the first to do so, but headlines like “Tag, You’re Out!” are just too tempting for journalists to turn their backs on. And, let’s face it, the notion of tag being “outlawed” is the kind of “you’ve got to be kidding me” story that people will read.
The reason for the ban is simple: Recess is "a time when accidents can happen," was a quote attributed to Willett Elementary School Principal Gaylene Heppe, who approved the ban. Having had a dangerous encounter of my own on the school playground during sixth-grade recess (I still have the scars), I can attest to the veracity of the concern. Of course, no one really thinks this is about children’s safety. We all know – and, unfortunately, understand - that it’s about the lawsuits that such accidents will almost certainly engender.
The lunacy of our litigious society is hardly a new phenomenon, but it seems to me that we have entered a new phase. Where once we would have had some kid getting hurt playing tag, the school getting sued, and subsequently banning tag, now we have what is effectively a preemptive action. Like Pavlov’s dogs, as a society, we know what’s coming – and rather than wait for the worst to happen, we take preventive action. Now, there’s nothing wrong with that approach, of course. Properly focused, it’s productive, proactive – even prudent, if not just plain, old-fashioned common sense. But, in a time when the only limits to being sued are the imaginations of a creative litigator and a receptive judiciary, well, you wind up doing things like banning unsupervised tag.
The mindset of retirement plan sponsors is not yet in that vein, so far as I am able to discern. In fact, in my experience, the fear of getting sued is perhaps the strongest consistent motivator of inertia in plan sponsor behaviors. Not that behavioral change is easy to accomplish – after all, when it comes to tough, complicated financial decisions with legal impact, plan sponsors are as inert as any participant.
Still, the fear of getting sued – or, as we tend to euphemistically refer to it, “fiduciary concerns” – remains one of the most frequently cited reasons for inaction. We tend to forgo offering investment advice to participants because we are afraid of getting sued, for instance – and we forestall implementing an investment policy statement – or taking a questionable fund off the menu – for much the same reason.
In fact, while fiduciary awareness is, IMHO, key to innovative, thoughtful plan designs, ironically, fiduciary concerns can be anathema to the same result. Fiduciary concerns are never all that far off a plan sponsor’s radar screen – but motivating good behaviors generally takes more than the fear of getting sued.
- Nevin Adams