Serving on a retirement plan committee comes with significant legal responsibilities that many fiduciaries don’t fully grasp until it’s too late. Under ERISA, committee members face personal liability for their decisions, meaning their personal assets could be at risk if they breach their fiduciary duties. As such, fiduciary training is table stakes for anyone overseeing employee retirement plans, as employee benefits law firm Bricker Graydon pointed out in a recent article penned by partner Lyndsey Barnett.
The reality of personal liability under ERISA is immediate and unforgiving. ERISA holds fiduciaries to the highest standard of care in law, requiring both loyalty and prudence in all plan-related decisions. Unlike other business roles where corporate protections might shield individual executives, retirement plan fiduciaries have no such safety net. If the plan suffers losses due to imprudent actions or inaction, fiduciaries can be personally responsible for restoring those losses. While fiduciary liability insurance can provide some level of protection, understanding your obligations through proper training is your best first line of defense.
The fundamental challenge facing many committee members is that you can’t fulfill duties you don’t understand. ERISA expects fiduciaries to act with the same care and skill that a prudent person familiar with such matters would. Without proper training, committee members often lack knowledge about their responsibilities and how to document decisions that demonstrate procedural prudence.
Legal precedent consistently shows that training—or the lack thereof—can make or break a fiduciary breach case. In Tussey v. ABB, Inc., the Eighth Circuit specifically noted that plan fiduciaries’ lack of training contributed to finding an imprudent process. Conversely, in Wildman v. American Century, the court ruled in favor of defendants who demonstrated prudent processes, including comprehensive fiduciary training for all committee members. These cases illustrate that while training doesn’t guarantee legal victory, its absence can be used against fiduciaries in litigation.
When Department of Labor auditors investigate plan operations, documented fiduciary training serves as tangible evidence that committee members take their responsibilities seriously and have made genuine efforts to understand their obligations.
From a practical standpoint, implementing fiduciary training doesn’t require extensive time commitments or complex logistics. Annual training sessions supplemented by periodic updates when regulations change or new committee members join typically suffice. Multiple resources are available: Attorneys, investment advisors, and third-party administrators often provide training as part of their services, and the DOL offers educational materials on its website. Training can be customized for different committee roles and should always be thoroughly documented.
Committee service allows you to meaningfully support your organization and employees, but it demands respect for the legal responsibilities involved. Fiduciary training provides practical tools to help you fulfill your duties effectively while reducing legal exposure for both individual committee members and the organization. If your committee hasn’t received training within the past year or has added new members, there’s no time like the present. The investment in such training pays dividends through enhanced decision-making capabilities and reduced liability exposure.
