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

In our last blog, “Am I a Fiduciary?” hopefully you were able to determine if you are a plan fiduciary.  And if so, the question becomes what are your duties in that fiduciary capacity?  However, before we look at the four main fiduciary duties, we should understand why your role as fiduciary is so important:

  • 73% of all workers are covered by 401(k) plans. This was just 12% in 1983.
  • Retirement plans held more than $5 trillion in assets as of 2016.
  • Fiduciaries are picking providers, investments, fee structures, etc.

An employer sponsored retirement plan has a huge impact on an employees ability to retire. And your role as a fiduciary can have either a positive impact or a negative impact on the success of your employees.  Oh, and you are personally liable for your actions as a fiduciary. So, let’s look at the duties that must be followed as a retirement plan fiduciary.


The plan must have at least three investment options offered to their participants.  Most plans have many more than three, so this duty is easy to meet.

Following Plan Documents

As a fiduciary you must ensure that the plan documents are being followed.  This means the adoption agreement provisions that cover eligibility, vesting, etc. and ancillary documents like investment policy statements.  Make sure you have read the plan documents so you can know if you are following them.


This is also known as the exclusive benefit rule, which means you must act in the best interest of the plan participants and their beneficiaries.  You must never put the company interests first when dealing with retirement plan fiduciary issues.


This is the reasonable person standard.  The question fiduciaries must ask is, would 51/100 plan fiduciaries faced with the same question make the same answer?  Having a process and documenting the process on everything plan related makes it much easier to show the decisions are prudent.

Paying Reasonable Plan Expenses for Necessary Services

When the plan participants are paying for plan expenses from their balances, and the plan fiduciaries are picking the investment platforms, record keeper etc. it becomes vital that those expenses are reasonable.  There are three questions that a fiduciary must be able to answer: 1) What are the expenses?  2) What are the services being received for the expenses?  3) Is it reasonable?  So they must be able to benchmark or compare the fees to something similar.

Being a retirement plan fiduciary is an important role and one that you should embrace to have a positive impact on your employee’s retirement.