Fiduciary Responsibility

America has a(nother) crisis on its hands! Between social security’s lack of long-term funding and deficiency of retirement plan access for the majority of U.S. small employers (i.e., less than 100 employees), there is a looming "retirement crisis" on the horizon. This crisis is defined by more than 60 million working Americans who do not have a workplace retirement saving program. More broadly, it is exacerbated by the inadequacy of savings the average working American has not saved for their own retirement.

It is well known that small business owners and other self-employed individuals have long been left to fend for themselves - including saving for their retirement. Building a business and working independently is not something we believe individuals should be penalized for - especially not in their golden years.

Fiduciary Basics

Offering a workplace retirement savings plan is most often done with the
best of intentions, yet carries a heavy burden of accountability under
the Employee Retirement Income Security Act of 1974 (ERISA).

Who is a plan fiduciary?

For a workplace retirement savings plan - such as a 401(k), the individuals generally deemed to be fiduciaries are most commonly employees of the workplace plan sponsor. The individuals who are most commonly deemed to be serving in a fiduciary role are:

Business Owner(s)
Plan Administrator
Plan Trustee(s)
Plan Committee Members
Senior Executive (with influence of the Plan)

Who is not a plan fiduciary?

ERISA exempts certain service providers that perform ministerial functions related to the routine management and administration of the plan, as directed by the designated plan fiduciaries. The service providers who are generally deemed "non-fiduciaries" are:

Accountants
Attorneys
Custodians
Record-keepers
Third-Party Administrators

How do you become a fiduciary?

You are named in the plan document or are separately appointed by the plan sponsor.
You exercise discretionary authority or control over plan assets and/or the routine administration of the plan.
You provide investment advice for compensation with respect to the disposition of plan assets.

ERISA's Core Fiduciary Duties

Loyalty

Act solely in the interest of plan participants and beneficiaries;

Care

Evaluate the reasonableness of fees and charges paid by the plan;

Prudence

Supply a range of investments that allows for adequate diversification;

Diligence

Administer the plan in accordance with the plan documents & instruments;

Skill

Manage the plan and its investments in the same manner as "an expert".

State Mandated Retirement Plans Small Business Tax Credits