401(k) Plan Sponsors — You might be a fiduciary if ….

Updated: September 28, 2009

401(k) Plan Sponsors there are no "ifs" about it….

You are a fiduciary if you:

  • Have authority to adopt, amend, merge, freeze, or terminate a plan
  • Make decisions in the selection and retention of plan fiduciaries
  • Select plan investment vehicles
  • Give investment advice with respect to plan assets for compensation
  • Acquire or dispose of plan assets
  • Make discretionary decisions under the plan (e.g., authorize or disallow benefit payments, decide whether a domestic relations order is qualified, whether a hardship withdrawal may be made, etc.)
  • Select plan providers, recordkeepers, etc.
  • Select plan consultants

Not sure you fully understand your role as a fiduciary? You are not alone. A large number of plan sponsors and human resource professionals rely on information provided by retirement plan vendors rather than an independent advisor.

Take a quick look at the common mistakes below. Do any of these apply to you or your company?

  1. Relying on non-fiduciary advice
  2. Failing to understand & benchmark plan costs
  3. Failing to obtain 404c protection
  4. Making decisions without a prudent process
  5. Failing to maintaining documentation
  6. Failing to operate the plan in accordance with plan documents
  7. Failure to monitor plan investments
  8. Providing improper employee advice
  9. Head in the sand - relying on provider to fulfill fiduciary requirements
  10. Failure to stay up-to-date in the industry
  11. Not protecting plan participants from conflicts of interest

Gordon R. Boardway, Senior Plan Consultant, 401(k) Advisors, gordonb@401kadvisors.com, 407-754-4036

Securities and Investment Advisory Services offered through Financial Telesis, Inc.

This message is intended only for the use of the individual or entity to which it is addressed, and may contain information that is privileged, confidential and exempt from disclosure under applicable law. If you are not the intended recipient, any dissemination, distribution or copying of this communication is strictly prohibited.


IRS 11 PS Mistakes http://www.mcguirewoods.com/news-resources/news/2999.asp?SearchFor=nondiscrimination

Top 10 404c mistakes http://www.allbusiness.com/human-resources/benefits-retirement-401k/651196-1.html

Top 10 401k Mistakes - Forbes (good list) http://www.forbes.com/2008/07/18/emergency-fund-grads-pf-money-in_avb_0718youngmoney_inl_slide_5.html?thisSpeed=15000

401k Investment mistakes, http://ww-success.com/blog/index.php/2007/11/25/how-to-avoid-common-mistakes-with-your-401k-investment/

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