Fiduciary Obligations

As the employer, you need to understand that you are the fiduciary of the plan as defined by Employee Retirement Income Security Act (ERISA).

These responsibilities include:

• Acting solely in the interest of plan participants and their beneficiaries and with the exclusive purpose of providing benefits to them;

• Carrying out their duties prudently;

• Following the plan documents (unless inconsistent with ERISA);

• Diversifying plan investments; and

• Paying only reasonable plan expenses.

Lawsuits are flourishing.  Last year, the Department of Labor (DOL) investigated 3,500 civil suits, with 4 out of 5 resulting in $1.2 billion in fines.  The risk for employers  comes hidden fees, revenue sharing funds and non-diversified plan investments.

 You Might Have a Problem with Your 401k Plan When…

   How to Limit Your Liability

  • Hire a co-fiduciary to share the responsibility and perform the required ERISA due diligence.

  • Have an open-architecture plan with a transparent fee structure and diversified plan investments.

  • Hire an outside Registered Investment Advisor to oversee investments and educate participants.




Useful Potty Reading Resources

Department of Labor Guide to Fiduciary Responsibilities

Why You Are Always On The Hook for Liability

Misconceptions Employers Have About Fee Disclosure