Plan sponsors who may not be all that confident about how well they understand their fiduciary responsibilities — and even those who are — might want to take a little test to see what they know.
The Guardian Insurance & Annuity Co. Inc. has launched its Fiduciary Awareness Quiz, which in 15 yes-or-no questions asks sponsors some basic questions about fiduciary obligations and responsibilities.
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"Business owners wear multiple hats and may be unsure about all of their responsibilities and obligations as a plan fiduciary under ERISA. It's important that plan sponsors appropriately mitigate their fiduciary risk — no matter how big or small the plan is," said Matthew Bryan, director, retirement marketing, Guardian Retirement Solutions.
After sponsors have replied to such questions as basic as "As the plan sponsor, we are a plan fiduciary" and as deceptively simple as, "We maintain written documentation of all key decisions we make with respect to our 401(k) plan)" and hit "submit," the quiz "provides a customized report with educational information to help plan sponsors better understand their fiduciary responsibility," according to Guardian.
Retirement advisors can use the report to see how well plan sponsor clients understand those responsibilities, and perhaps make suggestions to lessen risk.
The quiz was an outgrowth of Guardian's "The Small Plan 401(k) RetireWell Study: What's Working and Not Working for Small Businesses," a national survey of over 450 plan sponsors responsible for managing their businesses' retirement plans. Study results had indicated that a third of respondents didn't realize they were plan fiduciaries, and a quarter had no investment policy statement for their plans.
"The Fiduciary Awareness Quiz easily calculates how well plan sponsors know their fiduciary guidelines and procedures and quickly identifies the areas that demand greater attention," said Bryan. "As a result, small business owners acting as plan sponsors gain a better understanding of their role as a fiduciary and can work with their financial professionals and support partners to ensure that the best retirement outcome is achieved for plan participants."
Getting there, of course, will take more than answering yes or no to the questions on any quiz.
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