Individuals who administer employee benefit plans are subject to personal liability under ERISA, the federal law that governs employee benefit plans. Even with a participant-directed 401(k) plan, plan fiduciaries can be held liable for losses to a benefit plan incurred as a result of their alleged errors, omissions or breach of their fiduciary duties in the administration or handling of employee benefit plans. There are a variety of reasons, including the selection of plan investment options, monitoring those investments, and educating employees of those options. Further, plan fiduciaries cannot transfer their responsibilities to another party, such as an insurance company, professional investment firm, or third party administrator (TPA).
Steps can be taken to reduce personal liability, such as hiring a competent team of experts, but ultimately the fiduciary remains responsible for the management and administration of the benefit plans.
If you are an owner or officer who makes decisions about your company’s 401(k) plan or other qualified employee benefit plan(s), most likely your personal assets are at risk! Protect your assets with the proper insurance and trust the people at Holden Agency Insurance to help you customize an insurance package to meet your specific needs.
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