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The Fiduciary In The 401(K) Plan

October 14th, 2010 Posted in Retirement News

An employer sponsored retirement plan is an important employee benefit and sponsors have a fiduciary responsibility to protect the rights and benefits of participants and their beneficiaries.  Failure to meet fiduciary obligations can result in potential added expenses, litigation and in some cases, prosecution.  There are some basic principles that a fiduciary must always follow when it comes to the retirement plan.  These are:

  • Act solely in the interest of the plan’s participants and beneficiaries.
  • Maintain the plan and its assets for the exclusive purpose of providing benefits.
  • Act with care, skill, prudence and diligence as a prudent person would act in a similar circumstance.
  • Diversify the plan’s assets to minimize risk unless it is prudent to do otherwise; for a defined contribution plan, this rule can be taken to mean that you must provide sufficient investment choices to allow participants to diversify their account balance to achieve an optimum balance between risk and return that is appropriate for their long-term investment portfolio.
  • Maintain the plan in accordance with governing laws and the plan document.


Understanding how the principles above relate to actual decisions and activities of the fiduciaries can be difficult.  PRIMESolutions Advisors will provide the Plan Sponsor with a checklist to identify the key steps that fiduciaries should follow to meet their fiduciary obligations to the retirement plan and its participants.

PRIMESolutions Advisors, LLC excels in designing employee education and communication programs that target different groups of workers, in different ways, inside your organization.  Whether print, technology or in person, we craft a program so participants can save enough and invest well.

Helping participants adequately save and invest for retirement not only increases the likelihood of their successful retirement outcome; it also raises the profile and appreciation of their employee benefit.

The hot topics for 2011 will be fee disclosure and education.  Contact us for support in meeting your fiduciary responsibility and ask about our fiduciary checklist.  This 35-point checklist will assist you not only with fee disclosure and education but also in all facets of fiduciary governance.

Contact us at 877-366-401k.

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