Archive for June, 2010
George Vitta Speaks at May MAPERS Conference about DC Plan Fiduciary Responsibilities
“There’s a lot more to it than meets the eye” …a not so famous quote from the annals of defined contribution plan history. George discussed the six areas of fiduciary responsibility in a defined contribution-style plan: Plan Design, Participant Education and Communication, Investment Selection, Recordkeeping and Administration, Plan Expenses, Monitoring and Controls.
Many fiduciary breaches have occurred simply because of ignorance or neglect. Individuals sometimes don’t know they are acting as fiduciaries under the Employee Retirement Income Security Act (ERISA). Even those who were formally appointed often have no concept of what their duties entail or how to fulfill them. Employers and trustees today need to find out what fiduciary responsibilities they may have for their various benefits plans, and then make certain they are fulfilling those serious responsibilities. The assignment of fiduciary responsibilities is spelled out in benefit plan documents. Adding to the complexity, however, a fiduciary relationship may be legally inferred from circumstances.
If you answer “NO” to any of these questions, we can assist you with corrective actions and help you establish a fiduciary ‘best practices’ program.
Employer and Plan Participant Fiducary Checklist
| Yes | No | |
| 1. Fiduciaries are trained and aware of their duties and responsibilities. | [ ] | [ ] |
| 2. The investments offered in the plan represent asset classes across the risk/return spectrum. | [ ] | [ ] |
| 3. An investment policy statement is in place and is followed by investment committee members. | [ ] | [ ] |
| 4. The investment committee meets on a regular basis to discuss: | ||
| a. Investment performance of each fund. | [ ] | [ ] |
| b. Plan costs. | [ ] | [ ] |
| c. Whether or not to take action regarding a specific investment. | [ ] | [ ] |
| d. Participant’s education needs. | [ ] | [ ] |
| 5. A documented due diligence process is followed when selecting vendors. | [ ] | [ ] |
| 6. Investments are measured against multiple criteria, such as appropriate benchmark, peer groups and risk statistics. | [ ] | [ ] |
| 7. Committee decisions regarding the plan are made by the Prudent Man Rule and have the best interest of the participants in mind. | [ ] | [ ] |
| 8. Fiduciaries and parties-in-interest are not involved in self dealing. | [ ] | [ ] |
| 9. The plan is administered according to the plan document. | [ ] | [ ] |
| 10. Participants receive proper notices and documentation as well as basic communication and education regarding their plan. | [ ] | [ ] |
