Does your company have fiduciary responsibilities when it comes to a retirement plan? If your answer is, “I don’t know”, then you may want to read further.
There are a number of elements that define whether or not an employer is considered a fiduciary, according to a recent research paper by financial and investment consultants Milliman Inc. They include: (1) acting in the best interests of plan participants by allowing them to direct their investments or offering a diversified investment line-up; (2) assuring the plan has all of the proper documentation; and (3) making sure that all plan-related fees are properly disclosed and explained to participants.
The good news is that employers (i.e., plan sponsors) can alleviate some of these fiduciary responsibilities by designating a trustee. In the case of NADART retirement plans, Cardinal Bank is the named trustee and acts in this capacity.
When it comes to looking out for plan participants, fiduciaries can limit fiduciary liability in two ways, according to the Milliman paper. First, offer participants a way to direct the investment of their account balances. Second, offer them diversified investment options with a variety of risk levels, which can include balanced funds, stock funds, income funds, international funds and target dated funds. A NADART plan offers just such a selection. Fund return information and detailed descriptions of each of our funds are available on the NADART Web site.
A fiduciary also needs to make sure that your plan is in synch with your master plan document, investment policy statement, loan policy and Qualified Domestic Relations Order (QDRO) policy. NADART offers these services via our Compliance Department, which is also responsible for making sure that your plan is in accordance with federally mandated Contribution Nondiscrimination Testing.
Finally, it is the responsibility of the fiduciary to fully disclose any fees relating to the plan. With a NADART plan, this is not a concern. Not only does NADART fully disclose our fees, but our fees are among the lowest in the retirement plan industry. For more details, you can request a copy of our Understanding and Comparing 401(k) Plan Fees brochure through our Product Information Request Form.
If you like what you hear about alleviating some of your fiduciary responsibilities and would like more information on NADART retirement plans and services, please contact one of our representatives at (800) 462-3278 ext. 7161 or e-mail nadart401k@nada.org.