Fiduciaries of defined contribution retirement plans are under closer scrutiny than ever before. Plan participants are filing lawsuits, the media has increased its attention on fiduciary failures, and during plan audits the U.S. Department of Labor (DOL) now routinely asks for evidence of fiduciary training. In light of the potential personal liability, it is imperative that plan fiduciaries understand their responsibilities and adhere to the standards of conduct that apply to them. The latest white paper,  Fiduciary Roles and Responsibilities Under ERISA Defined Contribution Retirement Plans , presents an overview of Employee Retirement Income Security Act (ERISA) and DOL requirements for plan fiduciaries and others with direct responsibility for retirement plans. “It is important for plan fiduciaries to be aware of what their responsibilities are regarding plan oversight—not only because of their obligations to plan participants but because of the personal liability they take on ...

Approximately one-third of eligible workers do not participate in their employer-sponsored defined contribution plans, such as ERISA 403(b) and 401(k) plans. Research suggests that almost all of these workers would choose to remain participants if they were automatically enrolled. The increased savings would significantly improve their retirement security and may result in improved workplace satisfaction. Some employers have adopted automatic enrollment plans and many more are interested, but the fact that they are potentially liable for investment losses that may occur in such plans has been a major deterrent to wider adoption of this plan design. The Pension Protection Act (PPA) of 2006 removes several impediments from automatic enrollment plans. A key provision of the PPA is amending the Employee Retirement Income Security Act (ERISA) to provide a safe harbor for plan fiduciaries investing participant assets in certain types of default investment alternatives in the absence of parti...

To continue from our previous installment, understanding fiduciary responsibilities is important for the security of a retirement plan and compliance with the law. If you answer “no” to any of the following questions, you may not be complying with federal regulations. 6. Are you prepared to monitor your plan’s service providers? You should create and follow a review process at predetermined intervals to evaluate whether the current service provider is meeting your plan’s needs. This review should take into consideration the provider’s performance, reports, notices, fees, questions and follow-up. The review should include asking the plan’s service providers about policies and practices, ensuring that plan records are properly maintained and following up on participant complaints. The review process should be documented, and when using an internal administrative committee, you should educate committee members on their roles and responsibilities. 7. Have you identified parties-in-inte...