J.P. Morgan recently released their 2023 DC Plan Sponsor Survey. The survey covered many of the major areas of employer retirement plans which included financial wellness, plan design, investment options and retirement income. One of the interesting statistics that I noticed in the survey was:
“Only 55% noted they were a fiduciary to their plan’s organization, even though everyone surveyed is indeed a fiduciary.”
Determining whether you are a fiduciary to your corporation’s retirement plan involves understanding your role and responsibilities within the plan. In the context of retirement plans, a fiduciary is someone who has certain legal obligations to act in the best interests of plan participants and beneficiaries. Here are some steps to help you determine if you are a fiduciary to your corporation’s retirement plan:
- Review Plan Documents: Start by reviewing the plan documents and any other governing documents. These documents should outline the roles and responsibilities of plan fiduciaries.
- Identify Your Role: Determine your specific role within the retirement plan. Common roles that may carry fiduciary responsibilities include plan sponsors, trustees, investment committee members, and plan administrators.
- Understand Fiduciary Duties: Familiarize yourself with the duties and responsibilities associated with being a fiduciary. Fiduciaries are required to act prudently, diversify plan investments, follow the plan’s terms, and act solely in the best interests of plan participants and beneficiaries.
- Assess Decision-Making Authority: Consider whether you have decision-making authority or control over plan assets, investments, or plan operations. Those with control or authority over plan matters are often considered fiduciaries.
- Document Your Actions: If you are indeed a plan fiduciary, it’s important to keep records of your actions, decisions, and any efforts made to fulfill your fiduciary duties. This documentation can help demonstrate compliance with legal obligations.
- Stay Informed: Stay informed about changes in laws and regulations related to retirement plans, as these can impact your fiduciary responsibilities.
- Consider Liability Protection: Fiduciaries can potentially be held personally liable for breaches of their duties. It’s a good practice to consider fiduciary liability insurance or seek protections under ERISA (Employee Retirement Income Security Act) where applicable.
Remember that fiduciary status is not always straightforward and may depend on your specific actions and responsibilities within the retirement plan. It’s essential to fully understand your obligations to ensure you are fulfilling your fiduciary duties properly and in compliance with applicable laws and regulations.