How to Manage Your Fiduciary Risk -

Business owners who sponsor certain workplace retirement plans for their employees are “fiduciaries” under the Employee Retirement Income Security Act of 1974 (ERISA). Plan fiduciaries have a solemn responsibility under the law to act solely in the interest of plan participants, with the exclusive purpose of protecting retirement benefits. In case of a breach of duty, a fiduciary shall be personally liable to make good losses to the plan; shall be personally liable to return any profits resulting from the breach; may be subject to civil penalties and fines; and may be removed as a fiduciary. Consequently, plan sponsors have great incentive to develop fiduciary risk and liability management strategies.