Business owners and financial advisors have become increasingly wary of the responsibilities they take on when offering 401(k) and 403(b) retirement plans. That’s thanks to the Department of Labor shining a light on what “fiduciary duties” means and the liability those duties create.
It’s understandable. These changes caused giants in the industry — among them Fidelity, the largest record keeper of defined-contribution plans in the United States — to stop acting as fiduciaries.
But while various parties contribute to the design and maintenance of a company retirement plan, the Employee Retirement Income Security Act of 1974 (ERISA) makes it clear that the business owner — aka the plan sponsor — is liable for ensuring the retirement plan meets required standards.
That’s a heavy burden. Unfortunately, many plan sponsors mistakenly believe that hiring third-party professionals to implement and monitor their plan relieves them of that burden. This misguided assumption has cost some business owners dearly in the form of serious liability because they failed to meet their fiduciary duties.
Among other responsibilities, plan sponsors must:
- Ensure that fees for a plan are reasonable for the services offered.
- Many plan sponsors fail to take on the task of closely tracking fees and making sure they’re fair for the services provided. That’s despite the fact that unreasonable fees are one of the most common complaints in employee lawsuits against 401(k) plan sponsors.
- Understand exactly who is acting as a plan fiduciary and what their responsibilities are.
- Sponsors must ensure that all parties meet their obligations and that there are no coverage gaps in the plan. In essence, they must make themselves intimately aware of the services each provider offers — or excludes.
Most business owners understand the benefits of offering a company retirement plan, but you may be wondering if it’s worth it. If you’re running a business or financial advisory firm that wants to offer retirement plans, chances are you don’t have time to keep up with admin and don’t want to hire staff to do it for you.
That’s where we come in.
FiduciaryShield was created as a turnkey solution that simplifies how financial advisors offer and administer plans. That means we do the overwhelming majority of the work planning and properly administering the plan, leaving the financial advisor to be the face for these top-notch services. We ensure that plan sponsors and the financial advisors who serve them always meet their fiduciary responsibilities. We know every requirement for correctly designing and building a plan and, more importantly, we make sure your plan meets every one of them.
At FiduciaryShield, our team of experts manages company retirement plans and handles service-provider supervision. We take the hard work out of offering a 401(k) and make meeting your fiduciary responsibilities easy so you can focus on your company.
Contact us today at firstname.lastname@example.org for a complimentary plan review and consultation.