The standard of conduct for ERISA fiduciaries

ERISA fiduciaries are held to high standards—for good reason.

They manage employees’ retirement and welfare benefits, making decisions that impact people’s financial and health futures. So, what exactly does being a fiduciary require?

It comes down to duties.

1. Duty of Loyalty
Act solely in the interest of plan participants and beneficiaries. That means no personal gain, no hidden agendas, and no conflicts of interest.

2. Duty of Care
Exercise the “care, skill, prudence, and diligence” of a well-versed professional. If you don’t have the expertise, you’re responsible for finding the right people or resources who do.

3. Duty to Diversify
Fiduciaries must diversify plan investments to minimize the risk of large losses. Putting all the eggs in one basket? Not an option.

4. Duty to Adhere to the Plan Document
Fiduciaries must administer the plan according to its governing documents. If it’s written in the plan, it must be followed—no exceptions.

5. Duty to Avoid Prohibited Transactions
ERISA strictly prohibits self-dealing and conflicts of interest. Fiduciaries can’t profit at the expense of plan participants—this safeguard is essential for maintaining trust.

The bottom line?
If you’re serving as a fiduciary, stay on top of the rules, seek qualified help when needed, and always act in the best interest of your plan participants.

Which fiduciary responsibility do you think is most frequently overlooked?