Understanding Retirement Plan Fiduciary Responsibility


When administering a retirement plan and managing its assets, it is important for employers and plan sponsors to know their specific responsibilities. Learning the standards of 401(k) and fiduciary responsibility can be a headache after keeping track of all the rules and regulations ERISA provides. Thus, 401(k) plan sponsors are seeking answers to help better understand their roles.

Here are some quick facts that can help you better understand your role and fiduciary responsibilities:

  1. A plan fiduciary is anyone who exercises discretion in relation to one’s 401(k) plan or employed by a plan sponsor who acts in a fiduciary role with respect to the retirement plan. For example, all 401(k) plan sponsors and every member of the investment committee is a fiduciary.
  1. A fiduciary has the ability to appoint a fiduciary. Resigning from the investment committee and missing investment Committee meetings will not relieve you of your responsibilities and will not affect your status.
  1. It is recommended that your adviser is a fiduciary. Determine if your adviser is a fiduciary by looking at your signed contract by looking at ERISA Section 3(38) or 3(21) fiduciary.
  1. A plan sponsor can only welcome and appoint more fiduciaries, but never relieve its fiduciary responsibility.
  1. Neither your plan’s record-keeper nor attorney are likely to be fiduciaries since they do not have discretionary authority.
  1. Fiduciaries are not responsible for insuring investment option performance.
  1. If proper due diligence was not exercised in choosing an investment option by prior fiduciaries, existing fiduciaries are not exempt from responsibility/liability if they decide to continue to offer the fund.
  1. Existing fiduciaries are not exempt from responsibility/liability if they continue to offer the fund recommendation made by an expert.
  1. Employers should have fiduciary liability insurance and your plan should also have an ERISA fidelity bond. You can contract for co-fiduciary services and elect to comply with a number of the safe harbors the regulations offer.


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Topics: 401(k), ERISA, fiduciary responsibility, plan sponsors, retirement plan

The Importance of FMLA Administration


The Family and Medical Leave Act of 1993 (FMLA) may seems reasonably straight forward; job-protected leave for employees. However, according to the United States Department of Labor (DOL), thousands of employers are subject to employee complaints annually. These complaints cost employers over $2 billion (with a ‘B’!) in back wages to employees, alone. Additionally, legal expenses and the costs associated with a DOL investigation can be substantial.

Are you FMLA compliant? The answer may be “no”… the fact is that the rules and regulations are complicated, and few HR departments have the resources to properly deal with the complex nature of FMLA compliance. Further contributing to the headache, maintaining compliance with state laws regarding leaves (which can differ from federal laws) can be similarly complex.

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Topics: compliance, ERISA, FMLA, fmla administration

ERISA Compliance in a Nutshell



The Department of Labor recently hired over 1000 agents to increase ERISA Audits.  

  • ERISA is a body of law that established and protects participant rights in employee benefit programs, including Pension and Health and Welfare Benefits, which sets standards for reporting and disclosure as well as fiduciary conduct.
  • ERISA is enforced by the Federal Department of Labor,with penalties for non-compliance payable both to the government and directly to aggrieved employees.
  • A common misconception is that ERISA applies only to plans with 100 or more participants,while the law applies to nearly all plans with at least one participant.


While ERISA is a complex body of law,it is critically important that a plan administrator abide by the reporting and disclosure requirements of ERISA.

Disclosure requirements can be met by creating and distributing Plan Documents,Summary Plan Descriptions(SPD), Summary Material Modifications (SMM), Summary Annual Reports (SAR), and other documents as dictated by ERISA.

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Topics: compliance, employee benefits, ERISA