In addition to knowing who the plan fiduciaries are, it’s important to recognize if you are a fiduciary.
So, who can be a fiduciary? A fiduciary could be a business owner sponsoring a retirement plan, the named trustee of the plan, and/or retirement plan committee members, which we’ve previously noted. To take this one step further, if you are on the Board of Directors for a church endowment or on the Board of Directors of a local charity you are also a fiduciary held to the same standards of loyalty and prudence. This is often missed by individuals, but the same obligations apply whether running a billion-dollar retirement plan or the church’s endowment.
It is required by law, under ERISA, that every plan must have one named fiduciary. However, as far as best practices go, we often recommend having more than one fiduciary, ideally a committee that makes prudent decisions about the plan. Further, just like there are nine Supreme Court justices, it’s generally a good idea to have an odd number of people on a plan committee in the event of a close vote.
As a business owner, it’s crucial to know if you are a fiduciary and, likely you are. However, a plan participant may not know who is a fiduciary to the plan, and they may not see that it is important to know. What participants should know is who to go to if they have questions regarding the plan. They should know who the fiduciary is, how to get in touch with the plan’s advisor, and the advisor should respond in a timely fashion. If not, it’s critical to let the appropriate parties know so changes can be made, as the advisor should show that they value plan participants and their concerns.