ERISA §402(a) requires that every employee benefit plan be established and maintained under a written instrument that names one or more named fiduciaries with authority to control and manage the plan's operation and administration.
It is a structural rule, and its purpose is accountability: there must always be an identifiable person answerable for the plan. In a company of ten to fifty employees, that person is typically the owner, sometimes by explicit designation, sometimes by default through the office of plan administrator.
Signing the annual filing is not what creates the duty. Being named in the plan document is.
The name is not the only test. Under ERISA §3(21)(A)(ii), anyone who exercises discretionary authority over the plan — hiring advisors, selecting funds, approving fees — is a fiduciary even if not named in the document. The duty attaches to the decisions, and the liability is personal. And the standard is not "doing your best." ERISA §404(a)(1)(B) holds the named fiduciary to the care, skill, and diligence a prudent expert familiar with plan matters would use.
§402(a) names the fiduciary. §404(a) sets the standard that fiduciary is held to. Together they produce four ongoing obligations:
Act solely in the interest of participants and beneficiaries, for the exclusive purpose of providing benefits and defraying reasonable plan expenses. Where the plan's interest and a vendor relationship diverge, the plan wins.
Act with the care, skill, prudence, and diligence of a prudent person familiar with such matters. The benchmark is an expert in plan matters, not a busy owner doing their best.
Administer the plan according to its own terms, including eligibility, contributions, and the fee allocation method the document specifies.
Select and then continue to monitor providers, investment options, and fees. This is the duty most often unmet, because it never announces itself. There is no filing deadline for prudence, and no letter arrives when you stop looking.
ERISA §409 makes a breaching fiduciary personally liable to make good to the plan any losses resulting from the breach, and to restore profits improperly obtained. The corporate form does not absorb it; the liability runs to the individual.
In practice, small-plan exposure rarely arrives as a dramatic enforcement action. It arrives as a Department of Labor investigation letter, an employee complaint, or a question during a sale or succession, in each case asking the same thing: how did you decide the fees were reasonable, and what did you review?
Documentation is the defense. A prudent process, written down, is what distinguishes a defensible decision from an unexamined one.
Know, on paper, who the named fiduciary is and who holds plan administrator authority. Owners are frequently surprised by the answer.
The provider's statement of direct and indirect compensation, and whether it acknowledges any fiduciary status of its own. Most recordkeepers explicitly do not.
A dated memo, a benchmarking summary, or minutes of a short annual meeting. It need not be elaborate; it needs to exist and to be repeated.
Including decisions to leave things unchanged. A documented decision to keep an arrangement is prudent. Silence is not.
You can delegate investment discretion, including to a §3(38) investment manager. You can delegate administrative duties to a §3(16) plan administrator, such as a recordkeeper or third-party administrator. You can even allocate ERISA §402(a) named fiduciary authority to another named fiduciary or committee named in the plan document. But you cannot delegate away the duty to select and monitor the person you delegated to. That residual duty stays with you.
Generally no. Most recordkeepers and brokers state in writing that they do not act as fiduciaries to the plan. The 408(b)(2) disclosure will say so, and it is worth reading that sentence carefully.
ERISA applies to essentially all private-employer retirement plans regardless of size. Small plans get simplified reporting through the Form 5500-SF, not a reduced fiduciary standard.
Confirm who is named in the plan document, request the current 408(b)(2) disclosure, and check your latest filing for feature code 2R, on line 8a of a Form 5500 or line 9a of a Form 5500-SF. Those three steps answer most of it.
One finding and two questions, from your own Form 5500, within two business days. No call required, no cost, and nothing to sign. Companies of ten to fifty employees with roughly $1 to $5 million in plan assets are the ones we can help most.
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GlacierWealth, Inc. is a fee-only Registered Investment Adviser, independent since 2001. This guide is informational and educational only: not investment, legal, tax, or accounting advice, and not personalized to any reader's circumstances. Form 5500 filings are public but may be incomplete or outdated, and any observation drawn from one is confirmed against plan documents before it is relied on. Descriptions of ERISA obligations are general; consult your own counsel about your plan.