Fiduciary Risk Management
Do you have a fiduciary risk management strategy to keep up with ever-changing regulations?
As a plan fiduciary, staying up to date on legal and regulatory changes can be a challenge. The landscape for employer-sponsored retirement plans is complex and requires insights and guidance to stay compliant. We’ll provide guidance on fiduciary best practices and help you develop a strategy to manage your fiduciary risk as a retirement plan sponsor. Read our fiduciary risk bulletins to stay informed and up to date on legislative and regulatory changes.
Downloadable Content
Check out these additional resources to help you effectively manage your company’s retirement plan.
Doing Well by Doing Good
- Fiduciary Governance: Doing Well While Doing Good Guide
- Mastering Your Retirement Plan: Doing Well While Doing Good Presentation
Choosing the Right Advisor for Fiduciary Success
Navigating Plan Decisions with Confidence
On-Demand Fiduciary Risk Management Webinars
Watch this webinar to learn how SECURE Act 2.0's provisions can enhance retirement outcomes for plan sponsors and participants, with HUB International simplifying the steps you need to take.
Watch this webinar to learn about SECURE Act 2.0 and its over 90 provisions impacting retirement plans, requiring proactive steps from sponsors and participants.
Watch this webinar to learn more about the key areas that require attention from ERISA plan fiduciaries to reduce risk, and which fiduciary responsibilities can and cannot be delegated.
Watch this webinar to understand your fiduciary obligations and year-end considerations, enhancing the financial well-being of employees and the success of retirement plans.
Fiduciary Risk Management FAQs
Fiduciary risk is the potential for financial loss or legal consequences when someone managing a retirement plan fails to meet their ERISA fiduciary responsibilities. Whether it’s poor investment decisions, lack of oversight, or failure to follow plan documents, these lapses can lead to fiduciary liability. Strong fiduciary risk management practices help reduce this exposure and protect both the organization and plan participants.
Anyone who exercises discretion over a retirement plan or its assets — or provides investment advice for a fee — is considered a retirement plan fiduciary under ERISA. That includes plan sponsors, administrators, trustees, and some third-party advisors. If you’re making decisions that affect the plan, you have fiduciary duties and are exposed to fiduciary risk if those responsibilities aren’t met.
Fiduciary breach consequences can be severe. A fiduciary may be held personally liable for losses to the plan, face civil penalties, or even be subject to lawsuits. Breaches of ERISA fiduciary responsibility — whether intentional or not — also pose reputational risk. That’s why organizations need clear processes and solid fiduciary risk management strategies in place.
Plan sponsors can reduce fiduciary risk by implementing strong fiduciary risk management practices. This includes creating and following an Investment Policy Statement (IPS), regularly reviewing plan investments and service providers, benchmarking fees, and documenting all decisions. Working with experienced advisors like a 3(21) or 3(38) fiduciary can also help ensure ERISA fiduciary responsibilities are met and fiduciary liability is minimized.
A 3(21) fiduciary offers guidance and shares fiduciary responsibilities with the plan sponsor, who still makes the final call. A 3(38) fiduciary, on the other hand, has full discretion to make investment decisions — and takes on the fiduciary liability that comes with it. Both roles play an important part in supporting fiduciary risk management for retirement plan fiduciaries.
While not required by ERISA, fiduciary liability insurance is an important safeguard. It protects plan sponsors and other retirement plan fiduciaries from personal financial losses if they’re accused of breaching their fiduciary duties. Even with solid fiduciary risk management processes, this extra layer of coverage can be a critical tool in protecting against fiduciary breach consequences.
Certain fiduciary duties can be outsourced to qualified professionals — like 3(21) or 3(38) fiduciaries — to help manage fiduciary risk. However, plan sponsors still have an ERISA fiduciary responsibility to prudently select and monitor those service providers. Outsourcing supports fiduciary risk management, but doesn’t eliminate the need for active oversight.
If a breach of fiduciary duties is suspected, immediate action is key. Review the facts, consult ERISA counsel, and determine whether fiduciary breach consequences — such as financial harm to the plan — have occurred. If so, take corrective steps, which may include making the plan whole and notifying regulators. Solid fiduciary risk management means learning from the issue and strengthening internal processes to avoid future exposure to fiduciary liability.
