Broker Check

Fiduciary Services

3(21) fiduciary  We will serve as 3(21) fiduciary to plan

Fee review  Annual fee and expense review of current plan

  • Inventory condition and features of the plan

  • Review plan documents and provider service agreements

  • Review Fee disclosure both to plan and to participants

  • Benchmark plan design and costs

  • Assistance with fee negotiations

Fiduciary Training for committee

  • Conduct training for Plan  Committee members on:

    • Who are the fiduciaries of the plan

    • Fiduciary duties and responsibilities

    • Fiduciary liability and ways to reduce

    • Investment basics to support investment monitoring

    • Documentation requirements

    • Fiduciary insurance and indemnification

Plan committee creation

  • Discuss organizational structure and identify general objectives for Committee

  • Determine how the Committee will function & what duties it will perform

  • Determine who should and who should not serve on the Committee

  • Draft and present Committee charter for modification and adoption; charter to include:

    • Purpose of Committee

    • Committee members

    • Scope of authority

    • Roles and responsibilities

    • Meeting frequency

    • Reporting / documentation requirements

  • Fiduciary review

    • Evaluate 404(c ) compliance

The four key responsibilities of a fiduciary

  • Serve as a advocate – The exclusive benefit rule
    “a fiduciary must discharge his or her duties for the exclusivebenefit of plan participants and their beneficiaries; and for the purpose of defraying the expenses of administering the plan.”

  • Be a prudent “expert” – The prudent man rule
    “a fiduciary must act with care, skill, and diligence that would be exercised by a reasonably prudent person who is familiar with such matters.”

  • Diversify against risk – The diversification requirement
    “a fiduciary must provide diversified investments so as to minimize the risk of large losses.”

  • Govern according to plan policy
    “a fiduciary has a duty to act in accordance with plan documents, ERISA and the DOL.”

The importance of being a §404(c) plan

  • By complying with Section 404(c) of the Employee Retirement Income Security Act (ERISA) and applicable Department of Labor regulations, plan fiduciaries can help protect themselves from liability for losses resulting from a plan participant’s investment decisions.

  • To comply they must first inform the participants that they are responsible for the investment results of their directed accounts (usually incorporated into the Summary Plan Description and the Investment Policy Statement) and they must provide:

  • Diversified investment options – at least 3 investment choices, each that is diversified, materially different in terms of risk and return characteristics, and when combined with other alternatives tends to reduce the overall risk of loss through diversification, and

  • Investment transfer flexibility – allow transfers among investments at least quarterly, and

  • Investment information – adequate to make informed investment decisions, and the name, address and phone number of the plan fiduciary (i.e.) responsible for providing investment information

  • Note: Certain fiduciary duties not protected under §404(c) include the responsibility to prudently select and monitor the plan’s investment choices.