The Employee Retirement Income Security Act (ERISA) protects your plan’s assets by requiring that any person who exercises discretionary control or authority over plan management or plan assets, has discretionary authority or responsibility for the administration of a plan, or provides investment advice to a plan for compensation, or has any authority or responsibility to do so is subject to fiduciary responsibilities.
Plan fiduciaries include:
- Plan trustees
- Plan administrators
- Members of a plan’s investment committee
The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses.
Fiduciaries must:
- Act prudently and diversify the plan’s investments in order to minimize the risk of large losses
- Follow the terms of plan documents to the extent that the plan terms are consistent with ERISA
- Avoid conflicts of interest
Fiduciaries who do not follow these principles of conduct may be personally liable to restore any losses to the plan, or to restore any profits made through improper use of plan assets. Courts may take whatever action is appropriate against fiduciaries who breach their duties under ERISA.
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