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ERISA Fiduciary Role Simplified for Plan Sponsors in Compilation

ERISA Fiduciary Role Simplified for Plan Sponsors in Compilation

With the dust settling around the hotly debated DOL fiduciary rule retirement plan sponsors need to get up to speed — and fast — on what a plan fiduciary is, and whose responsibility it is to handle those duties.

A compendium of blog posts recently released by Cohen & Buckmann, P.C., a New York law firm specializing in executive compensation, pensions and benefits law, offers some useful insights and proactive tips to help plan sponsors wrap their heads around the varied and complex responsibilities of plan fiduciaries. Called “The Intelligent Fiduciary Series,” the compilation contains 15 brief articles on topics such as fiduciary insurance and what it covers (and what it doesn’t), five ways to get a better retirement plan audit, ways to avoid triggering a lawsuit, and more.

Required reading for all plan sponsors is an article titled “The Blindsided Fiduciary: Ignorance is Not Bliss.” The article cites an Alliance Bernstein survey of plan sponsors that found that 37% of fiduciaries surveyed didn’t know they were fiduciaries. Shocking? Maybe, but believe it or not, it’s possible to be a fiduciary without knowing it, since ERISA doesn’t require acknowledgement of fiduciary status. However, ignorance of the law doesn’t absolve sponsors of their responsibilities.

The ERISA definition of fiduciary is functional, meaning that you become a fiduciary based on your actions, such as administering a plan, having discretion over investment selection, and providing investment advice for a fee, like a plan advisor might do. Not understanding fiduciary responsibility can create problems, because you might think some of your service providers are fiduciaries, when in reality they’re not.

The article provides a quick checklist of those who are likely fiduciaries, including plan directors, trustees, plan committee members, investment managers with authority to make investment decisions, and others. Under the new DOL rule, the definition of a fiduciary is even more stringent, so it’s important for plan sponsors to examine their relationships with plan vendors and others closely to make sure they’re in line with current regulations.

Downloading a copy of “The Intelligent Fiduciary Series” is a good place to start getting a grasp of your fiduciary role and what it means for you and your retirement plan. And if you’re not sure about your fiduciary duties or someone else’s, ask. When it comes to fiduciary responsibility, ignorance is indeed not bliss.




Fred Barstein

Fred Barstein

Founder & Editor-in-Chief at 401kTV | TRAU | TPSU
Fred Barstein is the Founder & Editor-in-Chief of 401kTV. Fred is also the Founder and CEO of The Retirement Advisor University (TRAU), a collaboration with UCLA Anderson School of Management Executive Education and The Plan Sponsor University (TPSU).Mr. Barstein was also Founder and Editor-in-Chief of NAPA Net.
Fred Barstein

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