Are you a 401(k) sponsor? Read our booklet, “7 Simple Truths” to learn more about your duties as a fiduciary!

401(k) & Pension Fiduciary Services

Having a 401(k) plan or pension in place at your business is great; however, most small business owners do not understand the liability they take on when adopting their plan. As the sponsor of a corporate retirement plan, you are considered a fiduciary.

There is more to being a fiduciary than just offering a decent retirement package for your team. The Employee Retirement Income Security Act (ERISA) defines a fiduciary as one “who exercises discretionary control or authority over plan management or disposition of plan assets, renders investment advice regarding plan assets for a fee, or has discretionary authority or responsibility in plan administration.” While ERISA defines several fiduciary roles, a person’s fiduciary status is based on their plan function.

In meeting your fiduciary obligations, the Department of Labor lists the general responsibilities of a 401(k) fiduciary as:

Acting solely in the interest of plan participants and their beneficiaries and with the exclusive purpose of providing benefits to them; carrying out their duties prudently; following the plan documents (unless inconsistent with ERISA); diversifying plan investments; and paying only reasonable plan expenses.

The team at HeartStone Advisors is dedicated to supporting plan sponsors in meeting their fiduciary obligations. We provide ongoing fiduciary services and review all areas of a plan’s management. Providing plan design, participant education, and investment recommendations are just a portion of what we can do to ensure you and your employees’ futures are bright.

What Are 401(k) & Pension Fiduciary Services?

401(k) and pension fiduciary services can sound daunting. Simply put, any individual or entity with discretionary authority over a 401(k) plan’s administration or investments is considered a “fiduciary” to that plan. 401(k) plan fiduciaries ordinarily include the employer, trustees, and investment advisers. Attorneys, accountants, brokers, and the like are generally not fiduciaries. Generally, a fiduciary is someone who can exercise discretionary control over the plan – if there is no discretion, a fiduciary title is often not required. If you currently have a 401(k) or pension sold by a broker, chances are they are NOT a fiduciary, because brokers do no not handle the plan in a discretionary fashion! Commonly, the employer is their 401(k) plan’s primary fiduciary. Fiduciaries possess significant responsibilities and are subject to strict codes of conduct, as they act on behalf of 401(k) participants and their beneficiaries.

While 401(k) plans these days tend to employ the high-tech features and services, participants are still often unprepared to make informed investment decisions. For example, 36% of participants in self-directed 401(k) plans invest in only one fund, 19% are in only two funds, and 80% have never rebalanced their account. On top of that, 64% of plan participants feel their company is providing average to poor education about their retirement plan.

HeartStone Advisors is devoted to providing plan participants with the investment education they need. We recognize that successful education makes employees motivated, comfortable, and confident in their decisions moving towards retirement.

Why Are 401(k) & Pension Fiduciary Services Important?

The retirement of you and your employees is important. When you partner with HeartSone Advisors, you are partnering with a family-run business that has your best interests at heart.

Plenty of financial advisors, especially brokers, treat 401(k) plans as products to be sold. There generally is no fee transparency. 401(k) plan participants are unable to see how much they are truly paying for their plan because these costs are embedded in opaque mutual fund expenses. HeartStone does not operate this way.

We are ERISA 3(38) fiduciaries. This is the highest level of fiduciary care anyone can bring to your pension or 401(k) plan. As ERISA 3(38) managers, we take on full liability in writing for the investment management of your corporate retirement plan. Only ERISA 3(38) managers can provide plan sponsors and trustees this level of relief from liability. As a 3(38), we must disclose all fees being paid from the retirement plan. These fees are clear, accounted for, and visible on all participant statements. Our fees are also generally far lower than those of bundled plan providers who lack fee transparency.

Since we charge a clear fee that is paid by the retirement plan and its participants, clients rest confidently knowing that “we sit on the same side of the table.” We are beholden to you and your plan, not any mutual fund company or insurance firm.

Who Can Benefit From 401(k) & Pension Fiduciary Services?

As a business owner, you are in a position of great importance. Not only do you have customers to take care of and a staff to pay, but you have the opportunity to provide for your team at a deeper level – if you know how.

Many small to medium sized businesses lack the funds or expertise to have an in-house investment committee monitoring the nuances of their 401(k) or pension plan. HeartStone is the expert consultant for these businesses. We seek to meet at least annually with plan sponsors to monitor plan investments, and we also pride ourselves in providing employee education whenever possible.

We offer unbiased advice and guidance by providing maximum value at lower cost with a plan tailored to your specific needs that reduces liability, saves time, and results in confident and satisfied employees.

Get Started With Your 401(k) & Pension Fiduciary Planning Today

Getting started with HeartStone Advisors is simple. We are here to listen and formulate a plan that benefits everyone involved.

With over six decades of collective knowledge and expertise in the financial services field, we’ve experienced nearly every scenario there is. We have helped employers and their employees across nearly every industry.

We encourage you to reach out as soon as possible so we can help you get your retirement plans on the right track.