Your Responsibilities to Participants
Plan sponsors were designated fiduciaries through the Employee Retirement Income Security Act (ERISA). These fiduciary responsibilities are enforced by the U. S. Department of Labor, who summarize these responsibilities as follows:
“Fiduciaries have important responsibilities and are subject to standards of conduct because they act on behalf of participants in a retirement plan and their beneficiaries. These responsibilities include:
• Acting solely in the interest of plan participants and their beneficiaries and with the exclusive purpose of providing benefits to them;
• Carrying out their duties prudently;
• Following the plan documents (unless inconsistent with ERISA);
• Diversifying* plan investments; and
• Paying only reasonable plan expenses….
“With these fiduciary responsibilities, there is also potential liability. Fiduciaries who do not follow the basic standards of conduct may be personally liable to restore any losses to the plan, or to restore any profits made through improper use of the plan’s assets resulting from their actions.
“However, fiduciaries can limit their liability in certain situations.”
Lake Minnetonka Financial takes on these fiduciary responsibilities with you and helps you to limit your liability. Scott Brown helps you understand and carry out your responsibilities.
For more from the Department of Labor on Meeting Your Fiduciary Responsibilities, see their website.
*Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk.