The meaning of fiduciary comes from the Latin “fiducia”—which means trust. It is one of the most important concepts underlying the integrity of retirement plans. Let’s begin with an understanding of the basics of fiduciary law. The Employee Retirement Income Security Act (ERISA) outlines the basic responsibilities of a fiduciary.
A fiduciary must:
|•||Act for the exclusive purpose of providing benefits to participants and beneficiaries.|
|•||Perform duties with the care, skill and diligence of a prudent expert.|
|•||Periodically review plan expenses for reasonableness.|
|•||Monitor those to whom the fiduciary has delegated responsibilities, and act if responsibilities are not being fulfilled.|
|•||Diversify plan assets to minimize the risk of large loss.|
|•||As the plan administrator, make sure the plan is being operated according to the plan document and applicable law.|
At Bank of America, we recognize the significant responsibility of a fiduciary and have resources dedicated to supporting plan fiduciaries in better understanding and fulfilling their roles. We encourage you to go through the resources below and share with your colleagues.
Fiduciary Education Series. Broken into four brief 10‑minute episodes, this online, on-demand education series offers a convenient way to get helpful information.
Fiduciary Fundamentals brochure. Outlines the fiduciary role and best practices and includes links to additional resources.