Often times, when we are engaged by our new clients to assist them with overseeing their organization's retirement program(s), we often find that they are unfamiliar with their fiduciary responsibility.  Here are a few simple questions to assist you in determining if you may be considered a plan fiduciary:

  • Does your company currently offer a retirement plan to your employees?
  • What is your role as it pertains to the plan? Did you help select the financial advisor, plan recordkeeper, or Third Party Administrator?
  • Do you participate in plan review meetings?
  • Do you currently sign Form 5500?
  • Have you provided plan participants with a detailed breakdown of plan fees and expenses pertaining to their accounts, and disseminated investment instructions on how to access their accounts?
  • Have you hired a financial advisor to assist you in overseeing the plan? If so, have they worked with you to build an Investment Policy Statement (IPS)?
  • Have you built a custom Employee Education Program?
  • When was the last time you conducted due diligence to evaluate all of your current relationships that are involved in assisting with your plan?

What’s most important is that whether by title or by action, an individual sponsoring a workplace retirement plan is commonly regarded as a plan 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 their fiduciary responsibility.

Here are some examples of where plan sponsors too often can be found negligent:

  • Plan operations conflict with the procedures outlined in the plan document
  • Appoint a person at the company to serve on the committee or to supervise the plan with inadequate education about fiduciary duties or responsibilities
  • Appoint a person to the committee or to oversee the plan’s investment strategy with insufficient understanding of fiduciary duties or responsibilities
  • Failing to submit contributions in a timely manner

At Brio, we understand that some of these responsibilities can seem daunting; particularly when you have so many other responsibilities in your day-to-day job functions.  That’s why recent statistics show that roughly 93% of Plan Sponsors have engaged an Advisor to assist them in mitigating their fiduciary risks.  Do you have a Registered Investment Advisor working with your company to see that your retirement plan(s) is operating per the parameters written in the plan document?  Are you currently reducing your exposure to risk by consulting with an RIA to develop and amend policies and procedures for the plan?  Don’t risk a worst case scenario.  Brio is experienced, and focused on assisting you in achieving your plan goals and objectives, while also minimizing your exposure to potential fiduciary risks as much as possible.

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