OWNER BEWARE

If you are an owner in a private business, you know how critical a competitive retirement plan (Plan) is in order for you to recruit, retain and reward your employees. What you may not know is the fiduciary liability that your company (Plan

Sponsor) incurs when you do offer a 401(k) or similar retirement plan. The last thing you want is to get tied up in court after having been sued by a current or former employee (Plan Participant) over the investment options or the administration of the plan. Even though you have expertise in your business, you may not have expertise in the

Employee Retirement Income Security Act (ERISA) and how it and related regulation applies to you and your business partners. Let’s take a moment to identify some of your liabilities, and then we can discuss how to mitigate them.

 KEY LIABILITIES The Plan Sponsor has key fiduciary liabilities for both the administration of the retirement plan as well as for the investment options being offered. Let’s take a quick, broad look at these two categories. • ERISA Section 502 establishes certain monetary penalties for failures to distribute timely information to Plan Participants and beneficiaries, or to timely report required information to the Department of Labor as required of fiduciaries under ERISA

Section 3(16). The list of required notifications is long and can be a challenge to stay on top of, and the penalties can be painfully punitive. Many of the penalties are formulaic and can be composed of a daily charge per Plan Participant in addition to a flat daily penalty.

• The Plan Sponsor also has specific liabilities as they relate to the investment options made available to the Plan Participants. As you may imagine, there are extensive regulations to pay heed to, including the following: ° ERISA Section 3(21) relates to your fiduciary responsibilities for fund selection and monitoring responsibilities. ° ERISA Section 3(38) concerns your fiduciary responsibility to identify and replace funds that are failing the terms of the Plan’s Investment Policy Statement.

 WHAT TO DO? If you are reading this article and realize that you don’t recall having liability for these items, you are not alone. Most private business owners we come across have long forgotten that they were liable for these areas. To go a step further, many have not reviewed their plan in years. If your Plan review file is skinny, now is the time to begin to build a defense and to work with a firm like ours. We will help you put the plan out for a competitive bid, and we will provide options for you to contractually mitigate your fiduciary liabilities.

 SUMMARY With major mutual fund companies that are household names and are in the Retirement Plans business getting successfully sued by their employees over plan fiduciary errors, what chance does your private business have to avoid a similar fate? Why even run the risk? It is important to reach out to a plan advisor who is willing to contractually function as a fiduciary on your firm’s retirement plan. Don’t put your life’s work at risk. Give us a call!

Thismaterialisintendedfor informational purposesonlyandshouldnot be construedaslegalortax advice andis not intendedtoreplace theadvice of a qualifiedattorney,tax advisor, or plan provider . FILE# 3593147.1

C a n t e r o I n d r e by P h o t o  Tom McCartney andSharon Piet are teammates atMyAdvisor & Plannerandare RegisteredRepresentatives andInvestment AdviserRepresentatives withM Securities. Securities andInvestment Advisory Services are offeredthroughM HoldingsSecurities,Inc., a RegisteredBroker/DealerandInvestment Adviser, MemberFINRA/SIPC.MyAdvisor & Planner isindependently ownedandoperated.

Tom andSharon can be reachedat info@mapyourfuture.net, at630-457-4068,or you can visit themat www.mapyourfuture.net.

Securities and Investment Advisory Services offered through M Holdings Securities, Inc. (Member FINRA/SIPC). My Advisor & Planner is independently owned and operated.

File #0709-2018