Defined Contribution
During our discussions with
clients, concerns are expressed
by individuals responsible
for the administration and
governance of their company’s
retirement plans. Retirement
plan fiduciaries have been
increasingly subject to litigation
by plan participants, and are
concerned about how to manage
their risk.
COMMON PLAN FIDUCIARY
MISTAKES
AND
BEST
PRACTICES
Lawrence R. Peters, CPA, EA
Common Fiduciary Mistakes
A good place to start is to identify the most common
ERISA Fiduciary mistakes, and then adopt best practices
to reduce the possibility of committing these mistakes. The
mistakes that can potentially lead to the most significant
problems are:
1. Failing to identify who your Plan Fiduciaries are.
Fiduciaries may be named in the plan document, but
also may become fiduciaries by virtue of their functions
or actions. If an individual exercises discretionary
authority or responsibility for the administration of
the plan, or exercises any authority or control over
the plan or disposition of the plan’s assets, they could
be a fiduciary.
2. Individuals may not understand when they are acting
in a fiduciary capacity. Many individuals who are
members of a retirement committee perform both
fiduciary and settler functions.
Fiduciary duties include plan administration,
implementation of amendments or termination of
the plan, holding or investing plan assets, appointing
a fiduciary, and communication with participants.
16 | FALL 2013