After the purchase by private equity, the employer’s existing president was replaced by a private equity executive, “Winston.” As outlined in a previously adopted board charter, as company president, Winston assumed the position of Chair of the retirement plan committee. Winston undertook an immediate reading of the governing plan documents which identified The Employer as sole Named Fiduciary. He subsequently read through the Board Resolution adopting a charter for a governing retirement plan committee to act on behalf of the Employer as Named Fiduciary.

ERISA requires every governing retirement plan document to identify at least one Named Fiduciary. The Named Fiduciary has the primary responsibility for managing and controlling the Plan. Responsibilities include:

• Plan administration and oversight

• Ensuring plan compliance

• Acting solely in the interest of participants and beneficiaries

• Selecting and monitoring service providers

• Managing and delegating fiduciary duties in a prudent manner

In the opening paragraph, Winston found that the Employer was the Named Fiduciary. This is typical but not exclusive. Some documents may name the Plan Administrator or one or more individuals by name or by corporate title as the Named Fiduciary. 

When the Employer is the Named Fiduciary, one best practice is to create by charter a formal oversight committee. The charter addresses the purpose and responsibilities of the committee and establishes the number of committee members. The charter helps each committee member differentiate between their corporate role and their role as a plan fiduciary. Having the board of directors adopt the charter through resolution helps formalize the committee.

Winston also found a formal charter and board resolution adopting the committee. There was one ‘red flag’ that Winston should consider evaluating. He was automatically appointed to become not only a committee member but also the role of committee chair. While this may seem reasonable, some retirement fiduciary experts have questioned the appropriateness of using corporate titles to populate committee membership citing that, in some cases, an unqualified individual could become a committee member. 

Who is your Plan’s Named Fiduciary?

Securities offered through M Holdings Securities, Inc., an unaffiliated registered broker-dealer, member FINRA | SIPC. Investment advisory services offered by HORAN Wealth, LLC, registered with the U.S. Securities and Exchange Commission. Not FDIC Insured | No Bank Guarantee | May Lose Value