Limiting Your Liability

according to the DOL

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Today I want to tell you about how the DOL says you can limit your fiduciary liability.

But first, let me ask you a question.

The real question is, how can you as a company that sponsors a 401k or 403b plan, turn your plan from a liability into an asset that gives you an advantage in the marketplace, and become a 401k superhero to your employees?

That is the question, and these videos will give you the answers. Hey I’m Jonathon Schultheiss and welcome to the Ultimate 401k Advantage videos.

I want to talk about step 3 of our Ultimate 401(k) Advantage process, that is managing your company’s fiduciary responsibility.

The word fiduciary simply means putting someone else’s interest before your own.

As a company who manages a 401k or 403b plan that is made up of your employee's money, have an obligation to make sure that the decisions you make are in the best interest of those employees.

In another video I talked about the four things that every fiduciary should do. And those are:

Act solely in the best interest of your employees
Carry out your duties prudently
Diversify plan investments
And paying only reasonable plan expenses

The DOL goes on to say, that with these responsibilities there are also potential liability. And fiduciaries that do not follow the basic standards of conduct may be personally liable to restore any losses to the plan that come from their actions.

The DOL goes on to say that fiduciaries can limit their liability my demonstrating that they have carried out their responsibility properly by documenting the processes used to carry out their fiduciary duties.

In other words, when you make a fiduciary decision, you should make sure that you document the process that you used to make that decision.

That’s why in the book in Chapter 3, I highly recommend that you keep committee meeting minutes that document all the decisions that you make.

This will help you in limiting your liability.

If you would like more tips on limiting your fiduciary liability, then you can click the link and get a free copy of my book, The Ultimate 401k Advantage and learn our 5 step process for gaining an advantage and also becoming a 401k superhero to your employees.