There are a lot of people talking about fiduciary services and fiduciary liability, but what does it all mean? Does it have to be this confusing? Is it really that difficult?
While a lot of time is spent talking about the liability related to investments and fees, the actual plan operation and administration is extremely important. The IRS and DOL have authority to impose penalties and fines for plans who have operational or reporting errors even when the investments are extremely prudent. And for many micro to mid-sized plans, the liability associated with operational errors can be much more costly than issues related to investment choices.
Administrative Fiduciary Services Inc. (‘AFS’) serves as a co-fiduciary with employers with respect to administrative issues helping employers more effectively fulfill their fiduciary responsibilities and saving employers time. AFS can often provide these services at less cost than staffing these duties with the employer’s HR/Benefits staff.