Tip #4: Fiduciary Liability Alert for Employers

Employer-sponsored retirement plans are increasingly under a microscope. Fiduciaries to these plans (read: plan sponsors) must now provide a detailed breakdown of fees and expenses paid from participant accounts, and abide by updated rules.


Whether by title or by action, an individual sponsoring a workplace retirement plan is commonly regarded as a fiduciary. Few fiduciaries understand how easy it is to invite a lawsuit from a plan participant. In a civil action, the claimant does not need to prove criminal or fraudulent intent – mere negligence may result in a violation of the duty.


Where are plan sponsors too often negligent?

> When plan operations conflict with procedures in the plan document

> When they appoint a person (or committee) to supervise the plan with inadequate education about fiduciary duties or responsibilities

> When they appoint a person (or committee) to supervise the plan’s investment strategy with insufficient understanding of fiduciary duties or responsibilities

Do you have a Registered Investment Advisor working with your business to see that your retirement plan is operating per the parameters in the plan document? Are you planning to try and reduce your exposure to risk by consulting with an RIA to develop or amend policies and procedures for the plan? Don’t risk a worst-case scenario.




Your friends at Plan Partners!






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