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What is a fiduciary and is it possible that I could be one for our 401(k) plan?


If you “touch” the 401(k) plan, you may very well be!  Even someone who enters or send the information in for a new hire into the 401(k) plan could be a fiduciary.  A plan fiduciary is someone who has any type of control over the plan’s operations or administration or they exercise discretion.  Whether it is the trustee of the account, the investment advisor, or a plan administrator…any one of these individuals can be a plan fiduciary based on their professional responsibilities.  All plan documents must designate a fiduciary for the plan, however, even if the plan doesn’t name you one, your true status is based on what you do for the plan…not just your title.  It is important to note that attorneys, accountants, and actuaries are generally not fiduciaries when acting solely in their professional capacities.  The key is determining whether or not they are exercising discretion or control over the plan.

So I’m a fiduciary, does it matter?  Absolutely!  As a fiduciary, YOU can become personally liable for actions taken within the plan.  The Employee Retirement Income Security Act (ERISA) requires plan fiduciaries to act prudently and solely in the interest of the plan’s participants and beneficiaries.  It prohibits self-dealing and as noted above, provides legal relief when violations of the standards cause harm to plans. Fiduciaries have important responsibilities because they are acting on behalf of participants in the plan and must be sure to act in the best interest of those beneficiaries.

If you are looking for more information on your responsibility as a plan fiduciary, the Department of Labor has a great reference tool.  The tool can be found at:

Strategic HR, inc. offers assistance with a variety of Benefits and Compensation needs, including understanding how DOL regulations affect your business and helping craft creative compensation plans. Please visit our Benefits and Compensation page for more information.