How To Prepare Yourself as a Fiduciary

You have been selected as a member of your company’s retirement plan committee. Aside from adding an additional meeting to your schedule, what does that mean? Well, it means that you are trustworthy and dependable and the company leadership values your opinions and ideas. It also means you have some new responsibilities.

You may now be a fiduciary. Being a fiduciary carries with it some serious responsibilities that can have real consequences. Unfortunately, most committee members only have a vague understanding of what a fiduciary is and receive no training regarding their responsibilities. With government audits and class action lawsuits increasing, it can be dangerous to be unprepared for your role as a fiduciary. 

What Does It Mean To Be A Fiduciary?

The Employee Retirement Income Security Act (ERISA) defines fiduciary responsibilities as someone who must discharge their duties solely in the interest of the participants and beneficiaries and:

  1. Provide benefits while paying reasonable plan administration expenses
  2. Provide care, skill, prudence and diligence
  3. Diversify the plan’s investments
  4. Follow the plan documents

With a basic understanding of your overall responsibilities, what can you do to prepare yourself to adequately fulfill those responsibilities? This blog post takes a look at this specific topic.

It's in the Plan Documents!

The best place to start is in reviewing documents that govern the plan: 

Plan Document and Adoption Agreement

The plan document and adoption agreement are formal written documents that detail how the plan operates including definitions and provisions that must be followed in order to administer the plan in accordance with ERISA and DOL requirements. As a result, these documents provide critical information on how to fulfill many of your fiduciary duties.

Company Bylaws

There may be specific references to the retirement plan committee in your company bylaws. They would describe your responsibility for the administration and management of the company’s retirement plan. 

Retirement Plan Committee Charter

Your retirement plan committee itself should have a charter. The committee charter is a document used by the board of directors to delegate and outline committee responsibilities and duties.

Board of Director Resolutions

Your company board of directors may also have passed resolutions regarding the company retirement plan. When reviewing resolutions, look for ones delegating authority or responsibility with respect to a retirement plan.

Investment Policy Statement

Though not required by law, most retirement plans have an investment policy statement (IPS). The IPS describes the process for selecting and monitoring investments under the retirement plan.

Understanding Your Plan’s Governance

All of these documents are used to create the governance structure of your plan. Plan governance is simply the administrative oversight in place to make sure your plan stays effective and compliant. Your governance process is a framework that will guide decisions about all aspects of the plan. Because of this, it should be carefully crafted and followed.

When assigning responsibilities, it may be helpful to draw a chart of the different jobs and tasks required from the plan’s documents to help ensure the committee is covering all the requirements. Names can be added to the chart so that everyone on the committee is in agreement as to the division of responsibilities and expectations. This is also a great way to have documentation that can be signed off by all minimizing any misunderstandings.

Also, it might help to break down the responsibilities into two categories: fiduciary and non-fiduciary functions. Fiduciary functions include items like selecting and monitoring plan service providers and investment options as well as determining when deferrals from payroll will be submitted to the recordkeeper. Non-fiduciary functions examples are items revolving around plan amendment and plan design.

How We Can Help

Delegating fiduciary responsibilities can be a great solution for plan sponsors who lack time and the knowledge of ever-changing requirements to manage a retirement plan. At Stonebridge Financial Group, this is all we've done since our inception back in 2004! Our robust service offering starts with ERISA 3(21) and 3(38) services and is the tip of the iceberg. We are consultants that help you with every aspect of your plan:

  • Ensuring participant retirement readiness
  • 1:1 and group participant education and retirement readiness meetings
  • Financial wellness
  • Committee fiduciary training
  • Process creation and documentation
  • Plan design
  • Contribution match modeling
  • Annual plan compliance review
  • And so much more

We become your outsourced retirement plan officer who dives into the morass of retirement plan details and resolves issues so you don't have to!

Please click here to schedule a short call, give us a call at (855) 530-0500 x601 or email We look forward to helping your committee successfully fulfill their fiduciary duties with ease and excellence!