Monday, August 5, 2013

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.

Thursday, August 1, 2013

Fiduciary Responsibilities: ERISA Standards of Conduct

  • Act solely in the interest of plan participants—This may seem obvious, but you cannot prioritize your board, president, or local community interests over the plan participants.
  • Act prudently—The duty to act prudently requires expertise in areas such as investment. Lacking that expertise, a fiduciary should hire someone with that professional knowledge. Fiduciaries are responsible for a decision process, not investment results. The process used to make decisions must be documented to show fiduciaries acted prudently. 

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