The Employee Retirement Income Security Act of 1974 (ERISA) is the single piece of legislation that forms the basis for governance of all qualified retirement plans – including both defined benefit and defined contribution plans. However, due to the fact that ERISA was written primarily to address the governance of defined benefit plans, the language is not explicit to the roles and responsibilities of fiduciaries of defined contribution plans.

The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) is charged with enforcing ERISA, in the retirement plan space. As a result, they are empowered to publish interpretations of ERISA’s application for defined contribution plans – similar to what the Internal Revenue Service (IRS) does with the U.S. Tax Code. But, in doing so, EBSA has tremendous flexibility in defining the roles and responsibilities of fiduciaries to defined contribution plans.

As a result, fiduciaries are largely left to read between the lines to effectively perform their duties. As this is something that few business owners are equipped to do, Fiduciary Awareness exists to provide resources to assist fiduciaries in that process.

Fiduciaries are responsible to manage their employee retirement savings plan with care, prudence, diligence and skill – for the exclusive benefit of the plan, its participants and their beneficiaries. This entails a variety of components that must function together in a near-seamless environment.