What Kind of Fiduciary Are You?

Lee Beall | July 25th, 2011

Over the years, I’ve worked with many clients who served as fiduciaries for their company’s retirement plan. It’s a serious position. When you serve as a fiduciary, the position comes with responsibility outlined by ERISA, including keeping track of reasonable fees, completing and following an investment policy and providing guidance to participants. Unfortunately, plan fiduciaries who do not fulfill their duties can be found liable by the Department of Labor, and participants have also successfully sued fiduciaries in civil actions.

Investment Partners, LTD, a Rea affiliate, has developed a questionnaire to help you test how your fiduciary practices stack up. Take this quiz here.

In the meantime, you can learn from others’ mistakes. Here are some of the common mistakes fiduciaries our auditors see as they perform benefit plan audits around the state:

Not keeping track of plan fees. Fiduciaries and plan trustees have an obligation to review fees being charged to the plan annually and compare them with fees charged by similar plans.

Not having an investment policy statement. The investment policy statement outlines how and why funds are added to the investment choices your employees choose from.

Not regularly monitoring investments in accordance with the ISP. The ISP should outline the threshold for fund performance and dictate when funds should be replaced within the plan. Your company’s investment committee should meet a minimum of annually to review fund performance.

Not providing adequate guidance to employees. Fiduciaries are responsible for ensuring employees receive proper education to help them make sound decisions about their savings rates and investment choices.

Not using an Accredited Investment Fiduciary. An Accredited Investment Fiduciary has demonstrated that he or she has the knowledge and experience to apply fiduciary best practices.

Contact Our Ohio Benefit Plan Audit Professionals

If you are unsure about your fiduciary responsibilities or have or benefit plan questions, then contact us now! For additional information please contact Lee Beall, CPA at  614.889.8725, , or click here to contact  Lee . In a brief consultation he can assess your situation and determine the best way to proceed.
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