TITLE

Solving an Employer's Fiduciary Dilemma: Liability, Discretion and the Role of the Qualified Plan Advisor

AUTHOR(S)
Swisher, Pete
PUB. DATE
February 2004
SOURCE
Journal of Financial Planning;Feb2004, Vol. 17 Issue 2, p42
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Small- and mid-size business owners often fail to understand their fiduciary obligations when offering retirement plans to their employees in the U.S. A financial advisor serving as a fiduciary consultant can educate the employer and clarify the fiduciary obligations of all involved. Executives making decisions regarding employee retirement plans are by definition fiduciaries, and personally liable for the management of those plans. From the standpoint of the plan sponsor, the ideal situation is for all plan providers to accept fiduciary responsibility even if they are not required by law to do so. An advisor to a qualified plan might provide the following services to a plan sponsor: conducting vendor searches, establishing criteria for due diligence, implementing a program of fiduciary monitoring and ensuring that investments are promptly replaced when they fail to meet the established criteria. Risks can be classified as: reduced, retained, avoided and transferred. Fiduciary liability revolves around the use of discretion to buy and sell assets and manage the plan. Co-fiduciaries who do not accept discretion may, in fact, accept very little liability. It is a myth that fiduciary responsibility cannot be delegated. Named fiduciaries are not liable for the acts and omissions of other named fiduciaries if properly delegated.
ACCESSION #
12246781

 

Related Articles

  • How small businesses can improve their retirement plans. FOGLI, PHILIP J.; E. B. N. // Employee Benefit News;Sep2008, Vol. 22 Issue 11, p47 

    The article gives tips to small businesses on providing quality retirement plans for their employees in the U.S. Small businesses must select retirement plan providers offering reasonable fees and quality service. A retirement plan appropriate for small businesses should be within the overall...

  • Non-commutable streams flourish. Egan, Liam // Money Management;10/6/2005, Vol. 19 Issue 37, p6 

    Reports that fund managers are increasingly adding new non-commutable allocated pensions to their product range in response to the Federal Government's new transition to retirement rules in Australia. Effectivity of the government's new transition to retirement rules; Objective of the...

  • THE MANAGEMENT OF STATE EMPLOYEE RETIREMENT SYSTEMS. LISTOKIN, SIONA // Academy of Management Annual Meeting Proceedings;2006, pC1 

    This paper examines how the composition of the board of trustees of state pension funds affects the decision to increase employee retirement benefits. The results suggest that beneficiary representatives may be more conservative in increasing benefits than politicians on the board, while being...

  • HEALTHCARE: A small matter of trust.  // Corporate Adviser;Mar2010, p27 

    The article reports that healthcare trusts have been beneficial to large corporations, but providers are looking into offering trust options to small companies. According to Essential Health director of intermediaries Paul Walker, employers need to balance the tight budget and the employee...

  • Why Serve as a Trustee? Brislin, Joseph A. // Benefits Magazine;Jul2011, Vol. 48 Issue 7, p38 

    The article discusses the advantages of serving as a trustee on a multi-employer pension, health and welfare, training, vacation or other benefit fund. Factors that those considering becoming trustees should keep in mind include evaluating whether one has the time and dedication to devote to...

  • A family affair. Wickenden, Tony // Money Marketing;11/20/2008, p43 

    The article offers information on the employee benefit trust (EBT) in Great Britain. The author explains that this tax planning strategy has caught the attention of the Her Majesty's Revenue and Customs (HMRC). He points out that it offers a way for a company to pay money into a trust for the...

  • Importance of pension funds in banks' trust assets increases.  // Banking;Jan72, Vol. 64 Issue 7, p6 

    Discusses the rising importance of employee benefit programs to bank trust departments as of January 1972. Comparison of the growth in the number of new accounts in personal trusts and estates with the growth of employee benefit accounts; Basis of the data.

  • Fiduciaries Ordered to Restore Withheld 401(k) Contributions. Moore, Rebecca // Plan Sponsor News;2015, p1 

    A construction company ceased operations in 2013 and has not paid 401(k) participants their plan assets, according to a lawsuit.

  • Representation brings responsibility.  // Finance Week;10/13/2003, p59 

    Focuses on the representation process in employee benefits industry in South Africa. Liabilities of trustees; Ways for managing retirement investments.

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics