What fiduciary standards apply to my 401(k) plan administrator?

What the Law Says

The Employee Retirement Income Security Act of 1974 (ERISA) establishes the legal framework for fiduciary responsibility in private-sector retirement plans like your 401(k). While § 1001 itself is a policy statement—not a direct duty-imposing provision—it declares Congress’s intent to protect participants’ interests and sets the foundation for all fiduciary obligations found later in ERISA.

ERISA defines a fiduciary broadly: anyone who exercises discretionary authority or control over plan management or assets, or who gives investment advice for a fee, is a fiduciary. This includes your 401(k) plan administrator if they perform such functions.

Fiduciaries must meet three core standards: (1) act solely in the interest of participants and beneficiaries; (2) carry out duties with the care, skill, prudence, and diligence of a prudent person familiar with such matters; and (3) follow the plan documents—unless inconsistent with ERISA.

Violations can result in personal liability for losses caused by breaches, including restoring lost funds and forfeiting profits.

Statutory Text

The Congress finds that the growth of employee benefit plans has been rapid, and that approximately 45 million employees and their beneficiaries are covered by such plans... The Congress further finds that owing to the nature and design of such plans, and the economic incentives which operate upon those who manage them, the possibility of abuse exists...

— 29 U.S.C. § 1001 — Congressional findings and declaration of policy

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