Fiduciary Responsibility Awareness Test
As a fiduciary to your employee’s retirement plan, you have very specific responsibilities to which the DOL holds you accountable. The questions below will help you determine if you’re in full compliance with your fiduciary responsibilities.
- Are you confident that your plan’s investments are managed in ways that are fully compliant with all applicable laws, trust documents, and your written investment policy statement (IPS)?
- Do all the people who are involved in the management of your plan understand their roles and responsibilities? Are those responsibilities fully documented and acknowledged in writing?
- Do you have all service agreements and contracts in writing? Do you have complete confidence that they contain no provisions, which may conflict with fiduciary standards of care?
- Are assets within the jurisdiction of appropriate courts? How have you protected them from theft and embezzlement?
- An investment time horizon is the length of time over which an investment is made or held before it’s liquidated. Have you identified a time horizon for your assets?
- Have you identified an appropriate risk level for the assets in your plan?
- Have you identified a modeled return to ensure your investment objectives are met?
- Are selected asset classes consistent with risk, return, and time horizon that you identified?
- Do you have a written Investment Policy Statement (IPS), which details how you define, implement, and manage your investment strategy, as required by law?
- Is your investment strategy implemented in compliance with the required level of prudence?
- Are you confident that all applicable “safe harbor” provisions followed (when elected)?
- Are the investment vehicles in your plan appropriate for your portfolio size?
- Do you have due diligence process for selecting service providers, including the custodian?
- Do you conduct periodic reports to investment performance of your investments against an appropriate index, peer group, and IPS objectives?
- Do you conduct reviews of all qualitative or organizational changes of your investment decision-makers?
- Are the fees your plan pays for investment management consistent with agreements and with all applicable laws?
- Does your plan pay “finder’s fees” or other forms of compensation for assets? Are they appropriate and documented?
- Do you have a process in place to review your how well your organization meets its fiduciary responsibilities?