A Guide to Fiduciary Prudence: Part 1, Who is a retirement plan fiduciary?

Last Updated: November 02, 2012

Like many people, I am a plan fiduciary to my employer’s 401(k) plan. Because of my background in employee benefits law, I am keenly aware of the role, risks and responsibilities associated with this fiduciary status under ERISA.  Some people, however, are unaware that they are a plan fiduciary while others may be aware of their fiduciary status, but do not fully understand the scope of the risks, liabilities, duties and responsibilities that they have assumed as a result of their relationship to a retirement plan. I will be writing a blog series in the coming months to help clarify some of the issues simply being a plan fiduciary present, and will help bring to light how potential risks may be mitigated. Several key elements should be addressed to help you properly manage your fiduciary responsibilities, and will therefore be topics in this blog series:
  1. Who is a plan fiduciary?
  2. What are the roles and responsibilities of a plan fiduciary?
  3. What are the risks of being a plan fiduciary?
  4. How can a retirement plan committee help manage the fiduciary oversight of a plan?
  5. Who makes a good retirement plan committee member?
  6. What should a committee meeting agenda be comprised of and how should committee meetings be properly memorialized?
  7. How can third party service providers limit plan sponsors’ fiduciary liability?
  8. Can fiduciaries insure themselves against any potential losses?
This initial blog post focuses on determining who is a plan fiduciary. Hopefully you’re already aware of whether or not you qualify as a retirement plan fiduciary, but in case you’re not, I’ve provided a summary to help you determine your current status. Who Is A Plan Fiduciary? ERISA, the governing law over qualified retirement plans, states that a fiduciary is someone who is either named or acts in a manner that:
  1. Exercises any discretionary authority or control in the management of the plan or disposition of the plan’s assets OR
  2. Can or does render investment advice for a fee OR
  3. Has any discretionary authority or control in administering the plan
It is critical to note that the definition of plan fiduciary is not a clearly defined rule, but rather a facts and circumstances “balancing test” when looking at the role of the individual, which can be ambiguous. Certain individuals are more likely than others to be fiduciaries by virtue of their titles. And, although individuals are typically explicitly named as fiduciaries in the plan document, more often than not it is their actions that determine fiduciary status.  Below are some common examples of both non-fiduciary actions and fiduciary actions:         So ask yourself, “Do I have the discretionary authority over the management of plan assets or the administration of the plan?” If that answer is “yes,” then congratulations, you are a plan fiduciary! In my next blog post, I’ll discuss the roles and responsibilities of the plan fiduciaries—stay tuned! PCI’s archived blog entries are dated, the rules and statutes referenced may have changed. The analysis or guidance within these blog entries may have become stale, dated, or no longer accurate. PCI will not update or change these entries to reflect the latest analysis or development.


Pension Consultants, Inc.



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