The Get Out Of Fiduciary Liability Free Card

When I was a junior at Stony Brook, I took a course on Government Regulation of Business. We had a textbook in class, I never knew why because all of the exams were based on the lecture notes. I took some great notes and got an easy A. Taking good notes was a key for me in passing three different state bar exams (I am a glutton for punishment). I believe that my note taking was the difference between passing the New York, Massachusetts, and California bar exams.

When it comes to being a retirement plan sponsor, it is incumbent for every plan sponsor to take good notes and keep good records. It can be the difference between being liable for a breach of fiduciary duty and having a successful defense against that claim.

Keeping records of any fiduciary meetings, all education/enrollment meetings including copies of the education materials, are a solid start. Copies of all plan documents, amendments, valuations, Form 5500s, and investment policy statements. A lot of financial advisors and third party administrators can help you by giving you a fancy binder with copies of all of these materials.

In Monopoly, a get out of jail free card is quite valuable. Good fiduciary records and practices are the plan fiduciary’s get out of fiduciary liability card.

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