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April 25, 2016

A 401(k)Plan Sponsor’s Fiduciary Duties

If you are the plan trustee (sponsor) for your company sponsored retirement or 401k plan, you are legally responsible for any decisions made for the plan. It is vital that you know and understand you responsibilities.

As a plan sponsor, it is your duty as fiduciary to run the plan in the best interest of the plans participants. You must ensure that all investments perform well to their target and the fees are at industry standards. Many plan participants are not savvy when it comes to investing nor do they understand the 401k industry or its fee structure. Therefore, it is the duty of the fiduciary to guide plan participants.


The majority of the time the business owner is the plan fiduciary. However, in the corporate world, a fiduciary can be more than one person. The plan fiduciaries may include:

  • The business owner
  • HR manager
  • CFO

For non-profit organizations the fiduciaries may consist of:

  • The board of directors
  • The financial committee

If a fiduciary does not fulfill their duties, problems will occur. For example, the fiduciary can be held personally liable for the decisions they make regarding the retirement or 401(k) plan. The Department of Labor (DOL) will likely go after the fiduciary’s personal assets unless there was illegal activity involved. Employees may also file a lawsuit and lodge a complaint with the DOL.

The DOL’s Department of Employee Benefits Security Administration (EBSA) would like to increase its audits for every retirement plan to every two years. The EBSA audits often find errors which will mean paying fines and fees. After the fines and fees are paid then they will take you through a correction process.


Visit the Department of Labor (DOL) website at and download the booklet: Meeting Your Fiduciary Responsibilities.

Hiring a CPA firm that specializes in 401k auditing will make a difference in how smoothly your audit goes. Utilizing modern technology, it is possible to assist you entirely “off-site”, and with little or no distraction to your daily office routine. At Anders CPAs + Advisors we also offer flat-fee pricing for 401(k) audits so there are no surprises when you receive your bill.

For assistance, contact the team at (314)-886-7913 to talk about your 401(k) audit needs.

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