Retirement is something that all of us look forward to. For those that have a 401(k) plan, you may be familiar with a 401(k) Fiduciary. Knowing what this important professional does can help you determine if you need one or not.
What does a 401(k) Fiduciary Do?
A 401(k) fiduciary is someone that works to help manage your 401(k) and make decisions regarding it. They can make decisions about what money gets put into the 401(k), payouts, investments and more. A fiduciary can do a range of things in regards to the 401(k) plan itself.
They are required to act in the sole interest of the participants and anyone else that is going to benefit from the 401(k). Fiduciaries act for the purpose of providing benefits to workers that participate in the plan. It is also important that they follow the plan documents and help diversify the plan’s investments.
It is the duty of the fiduciary to make sure that any changes or decisions regarding the 401(k) are in the best interest of the person that holds the plan or the beneficiaries of the plan. They will be the one person or entity referred to any time there is a change to the plan at hand.
Does a 401k Plan Need a Fiduciary?
All 401(k) plans have to have at least one person named as the fiduciary. This person can be someone that you have hired to manage your plan for you. It can be someone who works for you to ensure that any decisions are in your best interest. If you have hired someone, you will likely have to pay some sort of fee to those professionals.
You can also be the fiduciary for your own plan. The fiduciary is the one person that is the go-to of sorts for all decisions in regard to the plan. They are the one that handles the operation and overall administration of the plan. The fiduciary responsibility can fall to you as the policyholder, which means you have to deposit the money for the plan and you are responsible.
It can also be that your employer has a fiduciary responsibility to the plan and is responsible for depositing your contributions to the plan. Fiduciary responsibility is something that is going to be present on any 401(k) plan. Who holds that responsibility depends on who is appointed to do so.