Richard Craig Krause & Associates, P.C.

A plan administrator, financial advisor and trustee are each “fiduciaries”. Fiduciaries owe a very high level of duty and obligation to the plan its beneficiaries. Fiduciaries must act in the best interests of the plan and its beneficiaries. Reasonable care is not sufficient. Self serving activities or management is not acceptable.

DUTIES OF A FIDUCIARY

1. A fiduciary must discharge his/her/its duties solely in the best interest of the intended beneficiaries.
2. A fiduciary must carry out his/her/its duties prudently.
3. A fiduciary must follow plan documents.
4. A fiduciary must diversify plan investments, and deposit contributions timely and appropriately.
5. A fiduciary must pay benefits as required.
6. A fiduciary must pay only reasonable plan expenses.
7. A fiduciary must prudently hire and maintain competent and experienced professional assistance and timely police the activities of the professionals engaged.
8. A fiduciary must not engage in a sale, exchange or lease between the plan and party-in-interest.
9. A fiduciary must not lend money or make any other extension of credit between the plan and party-in-interest.
10. A fiduciary must furnish goods, services, or facilities between the plan and party-in-interest.
11. A fiduciary must provide information required by the law. In trusts and estates accountings, inventories and other disclosures are common. In retirement plans initial plan details must be provided and annual disclosures must also be made to the participants.
12. A fiduciary must file tax returns timely.

Also consider:

1. Whether the fiduciary is bonded and insured. A performance bond generally protects against intentional wrong doing or misappropriation of funds. Professional fiduciary insurance coverage insures against damage caused by a fiduciary’s errors other than intentional wrong doing. Require both when and where possible.