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Business Owners: Do You Know You’re a Fiduciary?

September 1, 2021
By: Scott Mulvaney, Vice President and Retirement Plan Consultant, Girard, a Univest Wealth Division
Female business owner shaking hands with clients.
The Secure Act 2.0 proposals regarding retirement programs and savings plans for employees have brought the administration of employer-sponsored retirement plans to the forefront of many business owners’ minds. This new legislation will elevate the need for small business owners to understand the role and responsibilities they have as fiduciaries to their employees as a retirement plan sponsor.


What does it mean to be a fiduciary on employer-sponsored retirement plans?

Being a fiduciary means business owners must act in the best interest of their employees and make decisions that will put their employees in the best position possible for optimal retirement savings. Just as many advisors caution 401(k) participants against setting their savings on autopilot and utilizing the standard portfolio, small business owners should not let their plans “run themselves” without adjustments or considerations for employee needs.


How can business owners develop a better understanding of their fiduciary duties?

By working with a specialized advisor, business owners with employer-sponsored retirement plans can work to help put participants in the best position possible to accumulate savings with a reasonable cost to the retirement plan. Plan advisors can help business owners understand and communicate the investment menu, the cost of plan funds, and the cost of record keeping and CPA fees. Making informed plan decisions now can result in a significant savings on fees for the life of the plan.


What are the obligations involved?

As fiduciaries to retirement plans, business owners need to make decisions for the plan’s design, eligibility, matching, and a handful of other moving parts that make up a 401(k) program. Business owners' choices can have a dramatic impact on any or all of the employees who utilize their workplace 401(k). This is why it is key to work with financial advisors who specialize in retirement plans. With the right advisors you can help put employees in the best position financially for their golden years.


Are you a business owner working to establish a retirement plan, or perhaps already have a plan but aren’t familiar with everything that goes into being a fiduciary for your employees? Our team at Girard, a Univest Wealth Division, is available to work with you to not only create a plan that fits the needs of your business but also the individual retirement needs of your employees. Get in touch to learn more about your role as a fiduciary to your employee retirement plan and how we can help.


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This article is for general information purposes only and is not intended to provide legal, tax, accounting or financial advice. The information in this article, and any opinions expressed therein, do not constitute a recommendation or an offer to buy or sell any security or financial instrument. Viewers should consult with their financial and/or legal professionals before making any financial decisions.