So, What am I Really Signing-up For?
When a person is appointed or is being sought to be member of a retirement plan committee, the natural question is to understand exactly what the person is committing to. Simply stated, a committee member is a fiduciary, who is expected to always act on behalf of plan participants, using the care of a person familiar with retirement plans and investments. Fiduciaries are expected to exercise good care in the handling and diversifying of the plan’s assets, including the selection and monitoring of the investment options.
Yes, fiduciaries do have the potential for personal liability, both civilly and criminally. This is mitigated by following and documenting a good governance process, as well as by the bonding and liability insurance coverages. There is also a voluntary correction opportunity with the DOL and IRS if something does go awry.