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Considerations in Choosing a Fiduciary for Your Retirement Plan

January 3, 2014 Written by: Mike Rogers, Chief Compliance Officer. Choosing a fiduciary for your retirement plan is an important decision. We provide four questions to ask when conducting due diligence.

Serving as a retirement plan fiduciary is a big job, with many moving parts to coordinate. And fiduciaries answer to some pretty big guns: the IRS, the Employee Retirement Security Act (ERISA) – under the Department of Labor, and where the investments are concerned, FINRA and the SEC.

What Questions Should I Ask?

The three primary questions to ask when choosing a named fiduciary for your retirement plan are:

  1. Do the decision-makers have the knowledge required to carry out their responsibilities effectively? Research a potential fiduciaries experience, education, and licenses related to acting as your retirement plan fiduciary.
  2. Are the decision-makers motivated to stay current on retirement regulations and the performance of the plan’s investment options?Regulations pertaining to retirement plans are complex. It can be difficult to stay on top of your personal investments, let alone the array of investment options for a retirement plan. Both of these duties require a professional qualified to perform them.
  3. Do the decision-makers have the time to prudently select and monitor each investment option and service provider?  Will the decision makers know when an investment option is no longer appropriate for the plan? What process will they use to make this determination?

Structuring Your Retirement Plan to Minimize Your Liability

If you’ve been following our series on considerations regarding retirement plan fiduciaries, no doubt it’s become clear that a company owner should not be a named fiduciary. There’s just no way anyone has time to run a business AND fulfill all the duties required of a plan fiduciary.

When you work with a plan provider who understands all the implications of fiduciary responsibility, your risk is minimized and you and your assets are protected.

In our next blog, we’ll cover the “Fiduciary Code of Conduct” which outlines how fiduciaries are expected to handle their responsibilities.

Contact us for a complimentary risk analysis of your company’s retirement plan.