Delegating Fiduciary Responsibilities

‍

Today we will be discussing Delegating Fiduciary Responsibility as a Plan Sponsor.

As a plan sponsor, you accept the oversight responsibility for all plan activities and the fiduciary responsibility for the participants and their assets. However, this doesn't mean you need to act alone. Many plan sponsors leverage both internal and external expertise to support plan activities, typically assembling an oversight committee to review decisions and the plan's financial and operational status. You may delegate certain responsibilities to internal employees who then assume fiduciary responsibilities for those tasks. However, you remain accountable for overseeing these delegates.

When delegating, it's essential to undertake a thorough vetting process, including an assessment of the individual's capacity and expertise to handle the responsibility consistently along with their other duties. A comprehensive education process should be implemented, utilizing both the plan sponsor and other resources to effectively train the delegate and develop processes enabling them to meet their new responsibilities.

Documenting the vetting and education process is key for demonstrating due diligence in the event of an investigation or litigation due to non-compliance. Remember, delegating responsibilities doesn't absolve the plan sponsor from accountability. The sponsor remains ultimately responsible for the participants' assets.

For more information, contact us today.