Protecting plan sponsors from liability

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Topic overview

As fiduciaries, business owners who sponsor workplace retirement plans are legally obligated to follow a prudent process for selecting, monitoring and replacing investment alternatives for their plans. If they fail to fulfill their fiduciary duties, they can be held personally liable for investment losses and face civil and criminal penalties.

By allowing participants to self-direct the investment of their account balances and by following the other provisions of ERISA Sec. 404(c), plan sponsors can reduce their fiduciary risk with respect to investment performance.

Use this toolkit to help your plan sponsors mitigate their fiduciary risk by understanding and adhering to the necessary requirements.

Is this relevant to my clients?

Individuals could benefit from these tools if they:

  • Maintain certain retirement plans:
    • 401(k) and other defined contribution plans
    • Defined benefit plans
  • Do not maintain plans at this time but are considering establishing workplace retirement plans