Retirement Plans

What is a Fiduciary?

According to ERISA—the Employee Retirement Income Security Act—fiduciaries are defined as 1) those who exercise control or discretion in managing assets; 2) those who provide investment advice to the retirement plan; and 3) those who have discretionary authority in administering the retirement plan. In short, fiduciaries include the trustee, the plan administrator and the employer.

While fiduciaries cannot delegate their duties, they can delegate responsibilities. It is very common for plan sponsors to delegate their responsibilities for an ERISA plan to a custodian, trustee or record keeper and implicitly to the investment manager of each investment option.

However, often plan sponsors do not delegate the investment responsibilities and therefore are required to act as a prudent expert regarding the plan’s investments. SIA is qualified and prepared to act as a fiduciary representing the investments of the retirement plan.

SIA strictly follows the prudent expert rule, found in ERISA Section 404(a)(1)(B), which states that fiduciaries must act “with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent expert acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims .”

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