FIDUCIARY/EMPLOYER RESPONSIBILITY

Are You Meeting Your 401(k) Fiduciary Responsibilities?

As a 401(k) plan sponsor, you’re considered a fiduciary under the Employee Retirement Income Security Act (ERISA). That means you’re responsible to comply with specific government regulations, or face fines or litigation.

Many 401(k) sponsors struggle in this capacity: In 2014, nearly 65% of 401(k) investigations by the Department of Labor led to fines or other corrective action. Total fines topped $1 billion during the previous year, with the average fine per plan at $600,000. The risk of penalty has risen. The DOL hired more than 1,000 auditors in 2013 as part of a greater focus on HR departments.

Know your adviser’s fiduciary capacity

Your organization can be better protected with the help of a co-fiduciary. Not all 401(k) advisers serve in the same fiduciary capacity; some, such as broker dealers, do not serve as a fiduciary at all. You may think your organization is protected only to find out your adviser isn’t liable to execute certain fiduciary duties.

401k X Design can help reduce your exposure to liability by serving in an ERISA 3(38) fiduciary capacity—a service not typically offered by brokers. As a 3(38) adviser we assume full control over the investment management process and participant education. In other words, we’ve got you covered.

To learn more about a 3(21) vs. a 3(38) fiduciary, download the information page on the right.

Compare differences between fiduciaries with our free download.