Fiduciary Standards and Responsibilities for 403(b) plans

Question 1

An individual must be named as a fiduciary in the plan document to be considered a fiduciary to the plan
True
False

Answer 1

False
Certain persons are fiduciaries because the statute designates them as fiduciaries; others can become fiduciaries because of their responsibilities or because of their actions

Question 2

Which of the following activities may fall within the responsibilities of an ERISA 3(16) Fiduciary?
a. providing investment advice to plan participants
b. having investment discretion
c. providing investment advice to plan participants
d. certain administrative tasks

Answer 2

Certain administrative tasks
3(16) applies to organizations that provide administrative services
3(21) provides investment advice to plan sponsors and assists the employer in determining which investment to include under the plan and would share fiduciary liability with the employer for any recommendations that are acted upon
3(38) has investment discretion and authority over plan assets

Question 3

Which of the following activities may cause a person to become a fiduciary?
a. interpreting plan provisions
b. preparing materials for employee communications
c. processing claims
d. explaining benefit reports to participants

Answer 3

Interpreting plan provisions
Interpreting plan provisions involves some level of discretion or control of plan assets. The other choices are purely ministerial functions that do not in and of themselves make a person a fiduciary

Question 4

A written Investment Policy Statement IPS is required under ERISA
True
False

Answer 4

False
The DOL does not require that a plan maintain an IPS. It is considered a best practice for ERISA plans

Question 5

Fiduciary liability for investment losses may be reduced if the requirements of ERISA 404 (c) are satisfied
True
False

Answer 5

True
ERISA 404 (c) provides fiduciaries with some protection from performance losses when participants direct the investments of their accounts

Question 6

Non ERISA 403(b) plans must follow guidelines under ERISA
True
False

Answer 6

False
Non ERISA 403(b) plans are not subject to the ERISA fiduciary rules. If however, there are any fiduciary rules under state law, those rules must be followed