Fiduciary liability protects the organization and the individual who makes decisions and/or handles enrollments in the retirement plans and other employee benefits.
Why It’s Important
People with fiduciary status are determined by their duties, not their title, to act in others’ best interests.
Many organizations use an investment firm to handle retirement plans, but duties such as choosing the investment firm, administering or monitoring the plan, and transferring assets as employees come and go from the organization are all considered fiduciary duties. Under the Employee Retirement Income Securities Act (ERISA), the fiduciary’s own personal assets are at risk from potential allegations of mismanaging the plan assets.