The A to Z of Fiduciary Compliance

A practical guide for plan sponsors, fiduciaries, and HR leaders.

Don’t wait until an auditor shows up. Being audit-ready means having your plan documents, decisions, and communications clearly organized and up to date. Regular internal reviews can prevent surprises and demonstrate your commitment to compliance.

How do you know your fees are fair? Benchmarking your service providers and plan fees against industry standards helps ensure value for money — and fulfills your fiduciary duty to act in participants’ best interests.

Fiduciaries must avoid self-dealing and conflicts. Even the appearance of a conflict can damage trust and raise red flags. Document your process and, when in doubt, seek guidance.

ERISA requires you to provide participants with specific, timely disclosures. These include SPDs, fee disclosures, and more. Failure to deliver them isn’t just a paperwork issue — it can trigger penalties.

The Employee Retirement Income Security Act sets the rules for fiduciary conduct, reporting, and participant protections. If you’re involved in a plan, ERISA applies to you. Understanding its core principles is the first step toward compliance.

Your role comes with legal and ethical responsibilities. You must act solely in the interest of plan participants, with care, skill, and diligence. Personal liability is real — so make sure you know your obligations.

Strong governance structures define who is responsible for what, how decisions are made, and how oversight is maintained. Clarity here reduces risk and increases accountability.

Don’t forget: ERISA applies to more than retirement plans. If you manage a Health & Welfare Plan, you have fiduciary responsibilities there, too — from selecting vendors to communicating benefits.

If your plan includes investments, you must monitor their performance, fees, and suitability. Regular reviews and an investment policy statement (IPS) are essential best practices.

The “prudent person” rule means using sound judgment — the kind a knowledgeable expert would apply in similar circumstances. It’s not about perfection, but about process and reason.

You rely on TPAs, recordkeepers, consultants, and more. Vet them carefully, document your selection process, and review performance regularly. Remember: outsourcing tasks doesn’t outsource responsibility.

Fiduciary breaches can lead to personal legal and financial liability. That’s why it’s critical to understand your role, follow best practices, and keep a clear audit trail.

Multiple Employer Welfare Arrangements can offer cost savings and risk pooling — but they come with unique compliance obligations. Make sure you understand the structure before joining or administering one.

Participant notices like SPDs, SARs, and COBRA rights are legally required and time-sensitive. Develop a system to track deadlines and confirm delivery.

You can delegate tasks, but not responsibility. Ongoing oversight of vendors, fees, and plan operations is a non-negotiable part of fiduciary duty.

Your plan document is the legal foundation of everything you do. Review it regularly to ensure your operations align with its terms — and update it when needed.

You don’t have to know everything. Engaging ERISA counsel or consultants can help you make better decisions and protect your plan from costly mistakes.

Running formal RFPs for service providers helps demonstrate prudence, encourage competition, and ensure transparency. It’s also a strong defense in the event of scrutiny.

SPDs must be clear, current, and distributed to all eligible participants. They help your people understand their benefits — and help you meet legal obligations.

Fiduciaries should receive ongoing education to stay up to date on compliance obligations and industry changes. It’s not optional — it’s protection.

ERISA regulations evolve. Make it a point to track updates from the DOL and IRS. What was compliant last year might not be enough this year.

Your plan is only as strong as your vendors. Schedule regular performance reviews, evaluate contract terms, and hold providers accountable.

If you don’t write it down, you can’t prove you did it. Written procedures for plan operations, claims, and compliance are critical.

Conduct internal audits and reviews to spot issues before regulators or lawsuits do. A proactive approach is the best protection.

Understand exactly where your fiduciary responsibility begins and ends. If you’re named as a fiduciary, you’re on the hook.

With clear processes, regular reviews, and the right support, you can minimize risk and keep your plan running smoothly.

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