Recent litigation and agency settlements have reminded employers sponsoring employee benefit plans under ERISA that they are fiduciaries by definition (and their advisors might be functional fiduciaries).  That means that they owe a heightened duty of care to the plans, and more importantly, to the beneficiaries of those plans. Knowing that, employers can take steps to mitigate potential breaches of their fiduciary duty.

Background

Qualified retirement plans have been the subject of a spate of lawsuits over the years, alleging various violations of fiduciary duties by the plan sponsors and resulting in favorable settlements for the plan participants. Many of the suits were "excessive fee" claims that argued the fiduciary did not take sufficient care to avoid those excessive fees. Those claims seem to have slowed down recently, as employers have taken steps to monitor the fiduciary process leading to the decisions regarding the advisor fees.

Related: Fiduciary-minded benefits: the roles and responsibilities of advisors