Fallout from the mutual fund scandal proves that retirement plan sponsors cannot afford to abandon the practice of due diligence when deciding whether to eliminate funds from their 401(k) portfolio. Although daily disclosures from the Securities and Exchange Commission (SEC)-led mutual fund investigation are troubling, investment advisors say sweeping reforms are unnecessary and that plan sponsors need only make due diligence a part of their evaluation process for mutual funds. Patrick Reinkemeyer, president of institutional investment consulting for Morningstar, says at this point, plan sponsors "should be monitoring each individual situation as relevant and doing due diligence," but that is all. While Reinkemeyer believes more information will surface in the SEC investigation, he says plan sponsors should not overreact. Dallas Salisbury, president of the Employee Benefits Research Institute, agrees that much more has been made of the mutual fund probe than evidence warrants, noting that few funds have been identified, especially those with 401(k) assets. Attorney Carol McClarnon says the most important thing plan sponsors can do at this point is to be forthright to participants about where they stand and to keep them informed as events unfold.