How can employers manage the risk associated with fiduciary responsibilities?
Fiduciaries can try to grasp the innumerable details of their 401k plan; DOL, attorneys, consultants and various websites offer advice and guidance. Fiduciaries might also carry fiduciary liability insurance to protect them from the adverse effects of their own negligence or that of their co-fiduciaries. Generally speaking, employee benefit insurance excludes ERISA-related claims, and government-mandated fidelity/surety bonds covers only against intentional misappropriation of funds by those associated with the plan. Close scrutiny of contracts with providers is a necessity. For example, sponsors often assume they have delegated fiduciary investment advice for the selection and monitoring of investment funds to a service provider, but the service provider did not acknowledge that fiduciary role. Another option is to hire an independent fiduciary, whose expertise is managing retirement plans with the utmost regard for plan participants. Plan costs are often significantly reduced, confli
