Some of us are retirement plan fiduciaries, and some of us do everything we can to keep from being a fiduciary!  The Department of Labor (DOL) wants to clarify the line so it is clear to all parties whether or not they are serving in a fiduciary capacity.  The DOL had proposed a comprehensive new definition, but they pulled the proposed regulation this week.

In general, it is a fiduciary’s responsibility to:

• have only the plan and the plan participants interests at heart when making decisions,
• develop and complete checklists for processes and procedures,
• have adequate insurance coverage,
• be suspicious and be a good detective, and
• question everything related to the plan.

There are three official types of retirement plan fiduciaries defined by the Employee Retirement Income Security Act (ERISA):

§3(21) defines the fiduciary as someone who:

• is a decision-maker for the plan, and
• exercises discretionary authority over the plan or plan assets.

§3(16) is defined as a full scope fiduciary, and includes the Plan Administrator or Plan Sponsor.

§3(38) defines the investment fiduciary as someone who:

• has power to manage, acquire or dispose of any plan asset,
• recommends or monitors investments or generates investment models or portfolios, and
• is typically a Registered Investment Advisor (RIA), as many broker-dealers do not allow their representatives to sign on as retirement plan fiduciaries.

The DOL had issued wide-ranging guidelines that pulled many advisors into the status of retirement plan fiduciaries.  Those regulations were pulled after an outcry from many in the advisory community including broker-dealers.  Watch for this issue to be simmering for a while!