Family Business Succession Planning

401K Fiduciary Frequently Asked Questions


A Fiduciary is a person who exercises any discretionary authority or control over the management of the plan or its assets. A plan must have at least one fiduciary. Many of the actions needed to operate a 401(k) plan involve fiduciary decisions. As the owner of a company this is true whether or not you hire someone to manage the plan for you or do all of the plan management yourself. The simple act of having someone else sign the Form 5500 also does not limit the owner’s fiduciary duty. Often times this will be a “scare tactic” of a 401K sales representative because most plan administrators do not have a process for monitoring the plan, its investments and the changing laws. We have an entire section coming up that will help you better understand all of the fiduciary responsibilities and how to seamlessly handle them.

Some helpful questions could be:

  1. What are my duties as the Fiduciary?
  2. How can you help to reduce my fiduciary responsibilities?
  3. Do you offer Fiduciary Liability Protection?
  4. Do you offer fiduciary investment advisor programs? Please explain what’s included and the cost.
  5. Does your company offer Errors and Omissions Insurance?
  6. Will you handle purchasing the ERISA Fidelity Bond?