Fiduciary Risk and Responsibility

Potential Liability for Breaches of Fiduciary Responsibility

Risks include:

• Fiduciaries who do not meet their responsibilities may be personally liable.
• Participants or the Department of Labor (DOL) may bring a civil action against fiduciaries.
• DOL can assess significant penalties on fiduciaries.
• Additional penalties and excise taxes for prohibited transactions.
• Criminal penalties can be imposed for certain willful violations.

In addition, a fiduciary may be liable for breach of another fiduciary under the “co-fiduciary” rules. Under the law, if you know or should know that the other fiduciaries are not performing appropriately, you have a duty to blow the whistle on behalf of the plan.

Fiduciary prohibitions:

• Prohibited transactions/doing business with the plan—as a fiduciary, you cannot benefit from the plan;
• Use of plan assets in your own interest;
• Receiving money or any other consideration from any party doing business with the plan;
• Failure to separate participant salary deferrals from the employer’s assets in a timely manner;
• Failure to communicate required information to the federal government, participants and beneficiaries; and
• Failure to pay reasonable fees or to monitor fees charged.

If you have any questions about fiduciary responsibilities, or would like to begin talking to a retirement plan advisor, please get in touch by calling (855) 882-9177 or e-mail us at sbs@hanys.org.