Retirement Plan Sponsor Fiduciary Checklist

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While this is not an exhaustive list of all fiduciary duties, it can help you determine where risks exist. If you were unable to check all the boxes, your plan may have unnecessary fiduciary risk. A Pooled Employer Plan (PEP) may help by shifting many of these responsibilities and liabilities to a professional fiduciary.

About Fiduciary Liability:

As the sponsor of a retirement plan, you are considered a fiduciary under federal law (ERISA). This means you are personally responsible for acting in the best interests of your employees when it comes to their retirement benefits. Fiduciary liability can arise not only from making poor decisions, but also from failing to take action—such as not monitoring fees, not reviewing investments, or not keeping proper documentation. If the plan suffers losses due to inaction or imprudent management, you could be held personally liable. Importantly, your **personal assets may be at risk** if a fiduciary breach occurs.

Using a Pooled Employer Plan (PEP) can reduce or transfer much of this responsibility to a professional fiduciary, helping protect you and your business.

Who is Considered the Plan Sponsor and Fiduciary:

• For a corporation: the corporation itself is the official plan sponsor, but individuals making plan decisions (executives, committee members) are fiduciaries.
• For a partnership: the partnership is the plan sponsor, with partners and designated decision-makers carrying fiduciary responsibilities.
• For a sole proprietorship or single-owner LLC: the owner is both the plan sponsor and fiduciary.
• In practice, fiduciary liability applies to any individuals with discretionary authority over the plan — such as business owners, board members, HR or finance executives, and retirement plan committee members. These individuals may be held personally liable if fiduciary duties are breached.

Legal References on Fiduciary Liability:

• ERISA §3(16)(A) – establishes the role of the “plan administrator”. The plan administrator is responsible for ensuring the plan is created and managed according to ERISA. If a plan administrator is not named, the plan sponsor will be assigned this role. ERISA §3(16)(B) defines the “plan sponsor” as the employer (for single- employer plans) or the employee organization that establishes the plan.
• ERISA §3(21)(A) – Defines a fiduciary as anyone who: (1) exercises discretionary authority or control over the management of a plan or its assets, (2) provides investment advice for a fee, or (3) has discretionary authority in administering the plan. In practice, a 3(21) fiduciary is an investment advisor that provides advice to the plan sponsor in regards to the investments offered in a plan, but does not have the authority to make changes at their own discretion. The plan sponsor retains the final decision to make changes to the plan’s investment offering.
• ERISA §3(38)(A) – Defines an “investment manager” as any fiduciary (other than a trustee or named fiduciary) that has the power to manage, acquire, or dispose of any asset of a plan. In practice, the 3(38) fiduciary provides investment advice to the plan sponsor and has the authority to change the plan investments without consent of the plan sponsor. By law, 3(38) fiduciaries must be a bank, an insurance company, or a registered investment advisor (RIA).
• ERISA §409(a) – States that fiduciaries who breach their responsibilities are personally liable to restore any losses to the plan and may be subject to other equitable or remedial relief. In practice, this means the company is the official plan sponsor, while individuals who make decisions about the plan (owners, executives, committee members) are fiduciaries under ERISA §3(21)(A) and can be held personally liable under ERISA §409(a).