Did you know company owners and retirement plan trustees are held personally liable for the operation of their 401(k) or 403(b) plan?

Known as “fiduciary” responsibility, it ensures that company owners and plan trustees always make decisions in the best interest of the plan participants and their beneficiaries. Not only does this include determining whether investment offerings appropriately perform relative to the market, but also includes a legal responsibility to ensure that retirement plan fees are both necessary and reasonable, as required by ERISA.

It is becoming increasingly common for employees to sue their employers for violating this responsibility under ERISA law. Furthermore, smaller plans are not immune—recent cases have involved plans with as little as $9 million or even $1 million in assets.

Large hidden fees, high mutual fund expense ratios, and legal kickbacks to third-party administrators all put the plan sponsor at risk of being sued. And plan sponsors are held personally liable, so if your plan is sued for violating ERISA law, it is not the business that pays to settle claims. Rather, the plan fiduciaries do. These claims average around $0.5 million, but can be over $1 million for larger plans.

How We Can Help?

If your plan provider is a Registered Investment Adviser acting specifically as an “ERISA Section 3(38)” fiduciary—like Everington Consulting, Inc. (ECI) —then your personal liability may be substantially reduced. ECI provides 3(38) fiduciary services as part of our standard pricing.

Everington’s Fiduciary Services include:

♦ Acting as an “ERISA Section 3(38)” fiduciary to relieve employers’ personal liability

♦ Ensuring plans operate in compliance with plan written documents

♦ Selecting plan investments

♦ Ongoing review of investment providers

♦ Annual Plan Cost Benchmarking

♦ Quarterly Investment Performance Review

♦ Quarterly Education Materials & Retirement Plan Committee Draft Meeting Minutes

In other words, we can relieve most of your responsibility and associated personal liability regarding the selection and ongoing oversight of your plan’s assets. Most retirement plan providers typically do not.