æÃæü¤ÇéÎåÔÂÌì

by Eric O’Donnell, Director of Retirement Product Development at Sentry

Fiduciaries play pivotal roles in ensuring the integrity of a retirement plan. Generally, fiduciaries are defined as individuals who have discretionary authority over the plan or control over plan assets.

Federal law assigns certain responsibilities to plan fiduciaries. Fiduciaries are held to a legally defined standard, and many plan sponsors don’t have the expertise needed to meet all of their fiduciary responsibilities.

It’s up to you to hire service providers and consult experts to help guide your decisions. However, you’re ultimately responsible for the decisions you make—even if you’re following the guidance of an expert.

Here are seven main responsibilities you have as a fiduciary:

1. Operate in the best interest of plan participants

Fiduciaries must avoid conflicts of interest and act solely in the interest of plan participants and their beneficiaries. Documenting key decision factors can help prevent the perception of favoring others at the expense of participants at the expense of participants.

2. Follow the plan documents

Plan documents are the foundation of your plan, outlining important terms and conditions. You should be familiar with the plan documents and ensure the plan operates based on its established terms. If you don’t follow the terms precisely, it could be considered a breach of your fiduciary duties, and your plan may experience an operational failure.

3. Make timely disclosures

You’re required to distribute annual—and sometimes mid-year—notifications to your participants. These disclosures/notifications generally need to be made within 30 days of their due date. Events like the beginning of a new plan year or changes to investments trigger these required disclosures.

4. Diversify investments

As a plan fiduciary, your retirement plan investment lineup must be diversified to help reduce the risk of large investment losses. You should consider each plan investment as part of the plan’s entire portfolio and monitor the fund performance regularly. Make sure to document these investment decisions and the reasons behind them. It may be helpful to work with an expert to conduct the investment selection and monitoring process or guide you in your decision-making.

5. Evaluate plan fees

When evaluating fees paid by the plan, focus on the value a recordkeeper or other service providers offer instead of focusing solely on the actual cost. As the fiduciary, you must determine whether fees are reasonable in relation to the services provided. An easy way to do that is by reviewing your plan’s fee disclosure notifications. Overall, you’ll want to understand the fees you have, who’s paying them, and to whom they’re paid.

6. Review your process

The Department of Labor (DOL) recommends fiduciaries establish and follow a formal review process for assessing service providers at reasonable intervals, but for large plans, the DOL recommends assessing every three to five years.

Additionally, be sure to evaluate your service provider, reviewing their:

• Overall performance
• Ongoing support, including any reviews or reports they’ve provided
• Actual fees charged, including any notices of upcoming changes to their compensation

7. Protect your plan

Explore how your service provider protects your data by implementing security measures that are suggested by the DOL, such as:

• Multi-factor authentication for participant logins
• Encrypting plan data
• Providing participants with cybersecurity education, including:
  • How to make strong, unique passwords
  • Beware of free wi-fi and phishing
  • Using antivirus software and more

All these steps are essential components of meeting your fiduciary responsibilities—and providing a valuable retirement plan to your participants.

Eric O’Donnell is a director of retirement product development for Sentry Insurance. Sentry provides cyber liability, property, casualty, life insurance, and retirement products to dealers and other businesses. Learn more at .