Managing Your Fiduciary Responsibility

Investment Fiduciaries can be divided into three groups:Understanding Your Fiduciary Responsibilities

  • Stewards, including sponsors, administrators and committee members, manage the decision-making process. You don’t have to be named as a fiduciary in plan documents to be one.
  • Advisors provide comprehensive and continuous advice to Stewards.
  • Managers make securities transaction decisions and usually act with discretion.

Managing the retirement plan is usually not the top priority for the HR Manager, CFO, CEO or other individuals tasked with plan governance. The DOL details your responsibilities and liabilities in “Understanding Retirement Plan Fees and Expenses. How well are you fulfilling your fiduciary obligations?

  • Are you working solely in the best interests of the employees?
  • Are you trying to get as many employees as possible onto the road to a financially secure and comfortable retirement?
  • Are you trying to give the employees the “biggest bang for their buck” in terms of fees?

Departement of Labor Requirements
Department of Labor Requirements

When retirement plans go wrong, lawsuits can arise. In these cases, courts evaluate whether fiduciaries have satisfied their duties under ERISA They analyze whether they have acted prudently compared to a knowledgeable person under similar circumstances This is known as the prudent man rule. Under the law, fiduciaries are evaluated based on whether they use a prudent process for making decisions about their plan.

The fiduciary responsibility of caring for retirement plan assets involves:

  • Selecting and monitoring  investment options
  • Staying informed about regulatory standards
  • Documenting procedural prudence.

The Value of a Fiduciary
The Value of a Fiduciary Video

The Lead Fiduciary Practice™ is a tool we use to educate you on the basic requirements outlined in ERISA. It helps you evaluate your fiduciary management structure and implement a  program that documents the steps you take to meet your fiduciary responsibilities.

Plan Design Assistance

A number of recent studies indicate that significant improvements can be made in 401(k) plan participation and retirement savings levels through plan design changes.
Auto Plan Features
Automatic Plan Features

Many profit sharing plans are set up to give every employee the same percentage allocation. ERISA allows for several different methods for sharing profits. You can allow contributions to favor certain classes of workers. This method can help the owners and highly compensated employees in the retirement efforts and also decrease the overall plan cost to the company. As your advisor, we provide assistance and education to help you determine what plan features and designs are the most appropriate for your firm.

In the Managing Liability section, we discuss ways to leverage fiduciary advisors and fiduciary managers to share investment fiduciary liability and reduce your workload.


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