Understanding ERISA Fiduciary Duties: A Guide for Retirement Plan Committees

Serving on a retirement plan committee is an important responsibility. Whether you’re an employer, HR professional, CFO, or committee member, your decisions can have a lasting impact on employees’ retirement outcomes.

One of the most important concepts to understand is fiduciary duty under the Employee Retirement Income Security Act (ERISA). While ERISA establishes standards for many employer-sponsored retirement plans, fiduciary responsibilities are often misunderstood. A solid understanding of these duties can help committees establish sound governance practices and make informed, well-documented decisions.

1. What Is an ERISA Fiduciary?

Under ERISA, a fiduciary is generally someone who exercises discretionary authority or control over the management of a retirement plan or its assets, provides certain investment advice for a fee under applicable rules, or has discretionary responsibility in administering the plan.

Committee members, plan sponsors, and certain service providers may all have fiduciary responsibilities depending on their roles.

Being a fiduciary isn’t about holding a particular job title—it’s about the functions you perform on behalf of the retirement plan.

Tip: Ensure every committee member understands their role and responsibilities before participating in plan oversight.

2. The Duty of Loyalty

One of ERISA’s core fiduciary principles is acting solely in the interest of plan participants and beneficiaries.

This means committee decisions should be made with the participants’ interests in mind rather than the interests of the employer, service providers, or individual committee members.

Maintaining a participant-focused mindset helps support objective and thoughtful decision-making.

Tip: Document how significant committee decisions support the best interests of plan participants.

3. The Duty of Prudence

ERISA generally requires fiduciaries to act with the care, skill, prudence, and diligence that a knowledgeable person familiar with similar matters would use under comparable circumstances.

Prudence focuses on the decision-making process—not whether every investment performs well.

A prudent process often includes:

  • Regular committee meetings
  • Reviewing investment reports
  • Following the Investment Policy Statement (IPS)
  • Asking questions
  • Documenting decisions

Tip: A consistent governance process is often more important than attempting to predict short-term market movements.

4. Monitor Investments and Service Providers

Fiduciary responsibilities don’t end after selecting investments or hiring service providers.

Committees should establish an ongoing process to monitor:

  • Investment options
  • Recordkeepers
  • Advisors
  • Fees and expenses
  • Participant services

Regular reviews help ensure the plan continues to operate in accordance with its objectives and governance process.

Tip: Schedule periodic reviews of investment options and service providers as part of your annual committee calendar.

5. Follow the Investment Policy Statement

While an Investment Policy Statement (IPS) may not be required for every retirement plan, many committees use one to establish a structured investment oversight process.

An IPS can provide guidance for:

  • Investment selection
  • Monitoring criteria
  • Performance evaluation
  • Watch list procedures
  • Committee responsibilities

Perhaps most importantly, committees should understand the IPS and strive to follow the process it outlines.

Tip: Review your IPS annually to confirm it continues to align with your committee’s governance practices.

6. Understand and Monitor Plan Fees

ERISA fiduciaries generally have a responsibility to ensure that plan fees are reasonable for the services provided.

This may include reviewing:

  • Investment expenses
  • Recordkeeping fees
  • Advisory fees
  • Administrative costs

Evaluating fees is part of an overall fiduciary review—not simply selecting the lowest-cost provider.

Tip: Periodically benchmark fees and document the committee’s review process.

7. Keep Thorough Documentation

One of the strongest governance practices a committee can develop is maintaining clear documentation.

Committee records may include:

  • Meeting agendas
  • Minutes
  • Investment reviews
  • IPS discussions
  • Fee reviews
  • Educational sessions
  • Committee decisions

Well-maintained documentation demonstrates a thoughtful and consistent governance process.

Tip: Assign responsibility for documenting committee meetings and retaining governance records.

8. Invest in Ongoing Fiduciary Education

Retirement plan governance continues to evolve through regulatory developments, industry best practices, and changing participant needs.

Regular fiduciary education helps committee members:

  • Better understand their responsibilities
  • Stay informed about governance practices
  • Improve oversight processes
  • Make more informed decisions

Education strengthens the committee—not just individual members.

Tip: Include fiduciary education as a standing agenda item at least once each year.

Final Thoughts

ERISA fiduciary duties are centered on process, prudence, and acting in the best interests of plan participants. Strong governance isn’t about predicting markets or avoiding every challenge—it’s about maintaining a disciplined framework for decision-making.

By understanding fiduciary responsibilities, documenting committee actions, reviewing investments regularly, and investing in ongoing education, retirement plan committees can build a governance process that supports long-term plan oversight.

A knowledgeable committee, supported by thoughtful policies and trusted advisors, is better positioned to navigate the responsibilities that come with retirement plan governance.

If your retirement plan committee would benefit from fiduciary education, governance support, or an independent review of your committee’s oversight process, Redwood Wealth Management Group is here to help. We partner with retirement plan committees by providing education, investment oversight support, governance guidance, and ongoing committee resources designed to help fiduciaries fulfill their responsibilities with confidence.

Redwood Wealth Management Group is affiliated with Almanack Investment Partners, LLC (“Almanack”), an SEC-registered investment adviser. Investment advisory services are offered through Almanack. This content is for informational purposes only and should not be construed as investment, tax, or legal advice. For additional information about our services, please visit https://redwoodwmg.com/disclosures/

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