Who is a Fiduciary?

A fiduciary is anyone who controls the assets of a plan or uses discretion in administering and managing the plan. The appointment of a fiduciary is itself a fiduciary act. Frequently, individuals act as fiduciaries without knowing that they are doing so. For example, an HR director who reviews and selects funds with a plan provider has become a fiduciary and is held to the rigorous standards of the Employee Retirement Income Security Act of 1974 (ERISA).

Plan fiduciaries can be held personally liable for a breach of the obligations and duties set forth by ERISA. A breach of ERISA regulations can result from direct action or inaction. For instance, neglecting to review the plan's investment options for a long period of time can expose a fiduciary to claims of liability, especially if the investments change focus or go through a long period of decline. In addition to selecting a plan's investment options, the fiduciary should regularly monitor the fees, costs and overall performance of a plan's investment options.

Fortunately, fiduciaries can act to limit potential exposure by relying on a competent outside advisor with a fiduciary background to assist with these complicated matters. Broad Street Capital Advisors is such an advisor. Our retirement plan division can assist you in meeting the prudent fiduciary requirements of ERISA.