Brigette Honaker  |  May 15, 2019

Category: 401k

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fiduciary responsibilities under ERISAIf 401(k) plan administrators breach their fiduciary responsibilities under ERISA, they may be subject to legal action. In California, 401(k) plan violations are currently under investigation.

What are fiduciary responsibilities?

Fiduciary duty is the obligation of one party to act solely in the interest of another party. This duty generally applies when a relationship with a client or beneficiary requires trust, confidence, and discretion. There are a variety of situations where fiduciary duty apply.

One of the most well known situations that fiduciary duty applies is employee benefit plans. These plans are governed under the Employee Retirement Income Security Act (ERISA), and the relevant fiduciary duties are regulated by this federal law.

What are the fiduciary responsibilities under ERISA for 401(k) plan administrators?

Under ERISA, fiduciaries responsible for 401(k) management are incumbent upon plan administrators, trustees, investment managers, members of a plan’s administrative committee, those who select committee members, and any other individuals who exercise discretion in the administration of the plan.

Fiduciaries under ERISA do not include attorneys, accountants, actuaries, third party administrators, record keepers, individuals who act solely in their professional capacities, and individuals who perform solely ministerial tasks for a plan or plan administrator.

According to the U.S. Department of Labor, a plan administrator’s primary fiduciary duty is to run the plan solely in the interest of the participants. Other fiduciary responsibilities under ERISA include:

  • Acting prudently when managing an employee plan;
  • Diversifying a plan’s investment;
  • Minimizing risk and losses in investments;
  • Following the terms of a plan’s documents unless these terms are in violation of ERISA; and
  • Avoiding conflicts of interest.

“Fiduciaries who do not follow these principles of conduct may be personally liable to restore any losses to the plan, or to restore any profits made through improper use of plan assets,” the Department of Labor notes on their website. “Courts may take whatever action is appropriate against fiduciaries who breach their duties under ERISA including their removal.”

In addition to taking liability for any plan’s losses, plan administrators who are found to have violated their fiduciary duties may be ordered to pay a 20 percent penalty by the Department of Labor. They may also be removed from their position and face criminal penalties, if their violation was severe enough to warranty criminal charges.

Moreover, victims of 401(k) plan violations may pursue legal recompense against the plan administrators, as was the case with employees who sued Safeway grocery chain. Safeway settled the ERISA 401(k) claim.

Who may be able to take legal action for breached ERISA fiduciary responsibilities?

Attorneys in California are investigating whether or not certain 401(k) plan administrators violated their fiduciary duties under ERISA. Legal professionals are looking for plan participants who may have been at the receiving end of these violations.

Consumers may be eligible to participate in a California 401(k) violation class action lawsuit investigation if:

  • They are California residents
  • They work for a company with 500 employees or more
  • They participate in a 401(k) plan or another type of retirement plan
  • They may have lost money due because plan administrators committed an ERISA violation

Speaking with a qualified lawyer can help consumers determine if they have legal standing to seek damages for ERISA violations including 401(k) mismanagement, excessive fees, breach of fiduciary duty, and failure to adequately fund.

Join a Free California 401k Class Action Lawsuit Investigation

You may qualify for this 401k class action lawsuit investigation under the following circumstances:

  • You live in California;
  • You are employed by a company with 500 or more employees;
  • You participate in a 401k plan or another pension plan; and/or
  • You have been the victim of an ERISA violation such as excessive fees, mismanagement, breach of fiduciary duty, and/or failure to adequately fund.

If you are unsure if you’ve been the victim of any 401k violations, an experienced retirement plan attorney can assist you.

Learn More

This article is not legal advice. It is presented
for informational purposes only.

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