The Importance of Fiduciary Responsibilities of a Plan Administrator 

Retirement plans provide valuable benefits to employees, but they also come with legal and ethical obligations for employers. Under the Employee Retirement Income Security Act of 1974 (ERISA), those who oversee retirement plans—known as fiduciaries—are held to the highest standards of care and accountability. 

Understanding and properly executing fiduciary responsibilities is essential for maintaining compliance, protecting participants, and minimizing the risk of personal liability. For plan administrators, these duties are not just best practices—they are legal requirements. 

Understanding Fiduciary Responsibilities 

A fiduciary is any individual or entity that exercises discretionary authority or control over a plan’s management, assets, or administration. Common fiduciaries include plan administrators, trustees, and members of investment or benefits committees. 

Key fiduciary responsibilities include: 

• Acting in the best interest of participants and beneficiaries. All decisions must prioritize the interests of plan participants and their dependents. 

• Prudence in decision-making. Fiduciaries must act with the care, skill, and diligence that a knowledgeable professional would exercise under similar circumstances. 

• Diversification of investments. Plans must be structured to minimize the risk of large losses. 

• Following plan documents. Fiduciaries must adhere to governing plan documents unless those documents conflict with ERISA. 

• Ensuring reasonable plan fees. Regularly monitoring service providers and costs helps prevent excessive fees that can diminish participant returns. 

Failing to uphold these responsibilities can result in personal liability, regulatory penalties, and reputational harm to the organization. 

The Role of the Plan Administrator 

The plan administrator plays a central role in ensuring fiduciary responsibilities are met. This individual—or in some cases, committee—is responsible for overseeing day-to-day plan operations and ensuring compliance with applicable laws and regulations. 

Typical responsibilities include: 

• Maintaining accurate and complete plan records 

• Ensuring timely and accurate participant disclosures and filings 

• Selecting and monitoring third-party service providers 

• Reviewing investment performance and plan expenses 

• Coordinating annual plan audits and compliance testing 

While many administrative tasks can be delegated, the fiduciary obligation itself cannot. The plan administrator must act prudently when selecting and supervising vendors, as oversight remains a core fiduciary duty. 

Why Fiduciary Oversight Matters 

Strong fiduciary governance protects both the plan and its participants. It demonstrates a commitment to compliance, transparency, and responsible management of retirement assets. 

Effective fiduciary oversight leads to several key benefits: 

• Enhanced participant trust. Employees gain confidence knowing their retirement savings are being managed responsibly. 

• Improved plan performance. Ongoing monitoring of investments and fees helps optimize participant outcomes. 

• Reduced legal and regulatory risk. Clear documentation and consistent compliance reduce the likelihood of investigations or litigation. 

Ultimately, maintaining a fiduciary mindset—focused on prudence, diligence, and the best interests of participants—supports both organizational integrity and employee financial well-being. 

Partnering for Confidence and Compliance 

Fiduciary responsibilities are complex and continually evolving. Working with experienced advisors can help plan administrators stay informed, maintain compliance, and fulfill their obligations effectively. 

At Brady Martz, our Employee Benefits team partners with employers to provide guidance on fiduciary governance, plan oversight, and compliance strategies. To learn more about how we can help your organization meet its fiduciary responsibilities, contact our team today.