Am I a Fiduciary?

By Todd Hughes, J.D. – Retirement Services Officer

Are you a fiduciary of a company sponsored retirement plan?  Some of you that sit on a retirement plan committee, answer that question with a resounding yes.  While others of you may not know whether or not you are a fiduciary.  It is important for you to know because as a Retirement Plan Fiduciary you are held to a high standard of conduct. You are also personally liable should you not be a prudent and loyal Plan Fiduciary (see next blog where we outline the duties of a fiduciary). So……how do you know if you are lucky enough to wear the fiduciary hat?

The first way to become a plan fiduciary is to be named or delegated the authority. What in the world does that mean? All defined contribution plan documents (401K/403b) must name a plan fiduciary.  Most often the named plan fiduciary is “the employer”, so if you are the owner of a company or sit on the board of directors, congratulations you are most likely a plan fiduciary.  Being delegated this authority means that somebody, usually the employer, has told you that you are on the retirement plan committee or that you are responsible for overseeing the company’s retirement plan.

At face value it does not appear to be that difficult to determine if you are in fact a plan fiduciary…but it’s not that simple.  There is another way that you could be a fiduciary and that is through the function of your role, job, or action.   If in working with or administering your company’s retirement plan, you are exercising control or authority in the decision making, you are most likely a fiduciary for that action.  Here a couple of examples:

• Deciding to remove an investment from the plan’s investment lineup- Fiduciary
• Deciding to switch plan record keepers- Fiduciary
• Submitting the contributions each pay period- Non-fiduciary
• Deciding how to fix a late deposit- Fiduciary

You are a fiduciary if you have taken on that responsibility by your actions, by being named, or by being delegated.  What about your plan’s service providers, your record keeper, third party administrator, broker, adviser, are they fiduciaries?  Because the high standard of care and liability mentioned above applies to all plan fiduciaries, it is advisable to hire service providers, where possible, that serve in a fiduciary capacity.   If you don’t know, then ask them, or look at the service agreement or contract.

Once you answer the question “Am I a fiduciary?”, then the question becomes what are my duties as a fiduciary? Learn more about your duties as a fiduciary in our Retirement Plan Services Learning Center.