Section 404(a) of the Employee Retirement Income and Security Act (ERISA) is the fundamental principal that defines your responsibility as a plan sponsor. As a plan fiduciary you are required to discharge your duties "… solely in the interest of the participants and beneficiaries." What does this mean?
Fiduciaries must also exercise their duty "… for the exclusive purpose of providing benefits to participants and their beneficiaries and defraying reasonable expenses of administering the plan." In this regard, we can help you understand and implement procedures that are focused on benefiting your employees.
As you exercise your duties, you are required by ERISA to furthermore discharge them "… with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims." This implies you are prudent. How does one show prudence? How does one show diligence? Are you knowledgeable of the ever changing regulatory, economic and market environment? Do you know how your plan compares to plans of other organizations of similar size in the same industry?
Finally, as a prudent expert, have you met the ERISA requirement of "… diversifying the investments of the plan so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so?"
And finally, do your policies, procedures and processes reflect that you are governing and managing the plan "… in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of [ERISA]?"
Partnering with you in managing your retirement program to optimize value to your employees, we look to address all aspects of your compliance requirements and fiduciary obligations. As a plan sponsor, you cannot avoid your fiduciary role, but you can engage us as an advisor with the demonstrated resources and expertise to assist you in fulfilling regulatory requirements. When was the last time you benchmarked your plan relative to regulatory requirements, critical quantitative variables and your advisor's ability to assist in fulfilling your fiduciary role?