Fiduciary Responsibility

What Is Fiduciary Responsibility?

The Department of Labor, the Internal Revenue Service, and the Employee Retirement Income Security Act of 1974 (ERISA) have clear notions of what is expected of you as Plan Sponsor of your organization’s retirement plan.

What is a Fiduciary?

A fiduciary duty is a legal duty to act solely in another party’s interest. Parties owning this duty are call fiduciaries. The individuals to whom they owe this duty are called principals. Typically a fiduciary takes control of another person’s money.

Who Is a Fiduciary?

Fiduciary status is determined based on functions performed on behalf of the retirement plan – not a person’s job title. If you make decisions about how your retirement plan is administered or how assets are controlled, you are a fiduciary.

All plans must have at least one fiduciary (a person or entity) named in the written plan.

Source: DOL Meeting Your Fiduciary Responsibilities

Your Fiduciary Responsibilities

The DOL requires you to:

  • Act solely in the interest of plan participants and their beneficiaries with the exclusive purpose of providing benefits to them
  • Carry out your duties prudently
  • Follow plan documents (unless inconsistent with ERISA)
  • Diversify plan investments
  • Pay only reasonable plan expenses

Getting There: 8 Essential Elements for Plan Success

Process is everything. Both the DOL and ERISA expect you to meet very specific elements to ensure your plan has the opportunity to succeed.

8 Essential Elements

Meeting your fiduciary responsibility is all about process.

  • Establish

  • Qualify

  • Manage

  • Monitor

How Safe Harbor Partners Helps You Meet Your Fiduciary Responsibilities

As the plan administrator, you are responsible for overseeing all aspects of the plan. We’ll help you meet this responsibility by:

  1. Conducting a thorough review of your current process with the partners (custodian, record keeper, TPA) you’ve already chosen to determine if it falls short in any way.
  2. Conducting due diligence of funds to ensure they meet plan goals.
  3. Monitoring funds on an ongoing basis to determine if they continue to meet initial selection criteria.
  4. Reviewing all plan and fund fees to determine if they’re reasonable.
  5. Helping you plan a fully-compliant employee communications plan.
  6. Providing and managing an Annual Fiduciary Checklist to ensure you are compliant with emerging requirements.