Fiducia Group

401(k) Fiduciary Consulting
Provider Benchmarking
Provider Fee Negotiation
401(k) Fiduciary Audits
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Eight Penn Center West
Suite 101
Pittsburgh, PA 15276
877-707-9990 (toll free)
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Practical Responsibilities of
Plan Fiduciaries

Retirement professionals, national surveys and industry constituents all agree on one thing…..the top issue facing retirement plan sponsors today is fiduciary responsibility. Is your fiduciary process adequate and do those involved have the expertise needed?

Most plan sponsor representatives have taken measures to protect themselves personally as fiduciaries as well as the organization they represent. A retirement committee is in place and meets regularly; an Investment Policy Statement and process for monitoring the mutual funds in the plan is followed; and decisions are thoughtful and documented….but is this enough? In the past this might have been adequate, but the marketplace is evolving and changing.

It is clear that getting participants where they need to be is the challenge. Boomers are nearing retirement age without the means to retire. Retirement savings is taking a back seat to the current economic challenges facing participants. The result? Lawmakers, judges, regulators and the media are turning up the heat on plan sponsors and fiduciaries. Fiduciary process, fee transparency, cost reasonableness and the adequacy of savings rates are the issues on their minds, and the burden is falling squarely on plan fiduciaries and their service providers. How can fiduciaries tighten up their processes to address these higher expectations?

Establish corporate governance procedures for fiduciaries, including documentation of fiduciary selection and monitoring fiduciary effectiveness.

Engage providers who assume fiduciary responsibility with you. Use multiple experts to support your efforts and monitor their performance.

Encourage committee members to take their responsibilities more seriously. Sporadic meeting attendance or limited participation is troublesome.

Monitor eligible and active participant communication and education efforts. Education Policy Statements should be in put in place.

Utilize “safe harbors” that protect fiduciaries. ERISA 404(c) protection is a must, but most plan sponsors do not comply including those who think they comply.

Fiducia Group has identified a dozen key areas of emphasis for fiduciaries. It is more important than ever that fiduciaries pay attention to each of these areas, document their decisions and execute their implementation of decisions with prudence.