Fiduciary Source Manual

Help Your Clients Understand Their Fiduciary Duties

Executive Summary

Fiduciary duties and responsibilities are a growing responsibility for workplace retirement plan sponsors. To help you meet these challenges, T. Rowe Price is committed to providing high quality education that reflects the latest and best thinking in this area. Through our FiduciarySource® program, T. Rowe Price offers this Fiduciary Guide to plan sponsors. This valuable resource provides a basic overview of fiduciary responsibilities applicable under the Employee Retirement Income Security Act of 1974 (“ERISA”).

This guide is an introductory fiduciary resource for defined contribution retirement plan sponsors and their employees working with the plan(s). It streamlines complex fiduciary topics into an easy-to-understand format. The goal is to help plan sponsors determine who their plan’s fiduciaries are, and what basic duties those fiduciaries have. This material can help lay the foundation for the development of good fiduciary practices, such as asking the right questions, creating a process for decision making, and seeking help from experts when needed.

This Guidebook Covers:

  1. Who Is a Fiduciary?

    We will help you identify who is a fiduciary, distinguish fiduciary from nonfiduciary activities, and better understand permissible delegation of fiduciary responsibilities to another individual.

  2. Basic ERISA Fiduciary Duties

    It is important to understand the responsibilities ERISA places on plan fiduciaries. A fiduciary’s performance of these legal duties will be measured, in large part, by the key concepts of “loyalty” and “prudence.” We will also introduce you to the concept of “prohibited transactions” and some exceptions relevant to common plan activities.

  3. Overseeing Investments

    One of the most important aspects of your retirement plan that requires care and attention is the plan’s investment lineup. As a plan sponsor, it is critical for you to understand who has fiduciary responsibilities with respect to your plan’s investments, what those responsibilities are, and how they may best be discharged.

  4. Overseeing Service Providers

    To properly administer your plan as a fiduciary, it is likely you will need to retain professionals to advise and assist you. Selecting appropriate service providers is one of your most important responsibilities, and ERISA requires you to fulfill that responsibility 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."1 We will help you think through issues that commonly arise in the selection of service providers.

  5. Helping Participants

    Helping your participants goes beyond compliance issues. This includes considering optional plan features, like automatic enrollment, education, or investment advice. Your plan may be in full compliance with the rules, but your participants may not be making the most of the retirement savings opportunity you provide.

  6. Plan Administrator Basics

    Here we discuss qualification requirements under the Internal Revenue Code, IRS audits, and correcting plan document and operational errors. Although they are not fiduciary functions, these are important rules with significant consequences for noncompliance.

  7. Fiduciary Liability, DOL Audit, Fiduciary Insurance, and Bonding

    ERISA 401(k) plans have moved from a supplemental to a central role in providing retirement income—indeed, it is now quite common for employees to rely only on a 401(k) plan to fund their retirement. And through tax deferral and opportunity for investment, 401(k) plans have become very popular vehicles for employees to fund retirement.

Guidebook

Increase Your Value to Fiduciaries

Give your clients this guidebook to help them better understand who is a fiduciary, their basic responsibilities, and the importance of a well-documented process for fiduciary decision-making.

1 29 U.S.C. §1104.

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