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What makes being an ERISA plan fiduciary significant?

On Behalf of | Sep 20, 2021 | ERISA

If you’re a working adult in New Jersey, retiring is likely an important part of your future. Fortunately, many employers offer retirement plans to their workers. If you have a retirement plan, you’ll also have a fiduciary who helps administer and manage this plan. It’s understandable to wonder what this role entails. Here’s more information about the significance of being a fiduciary.

Acting in the best interest of plan participants

One of the most important responsibilities as a fiduciary is to act in the best interest of plan participants. A fiduciary needs to be a solid investor.

In addition, when looking over ERISA disability claims or other information, it’s vital for a fiduciary to pay close attention. This is because a fiduciary must follow all terms within the retirement plan’s documents. They’ll need to make fast updates to documents as plan-related changes occur.

Knowing how to properly diversify investments

Every investor knows that there’s always risk associated with investing. If someone invests all of their money into a single company or fund, one mistake could mean that plan participants lose a lot of money. Considering that, a fiduciary must know how to diversify investments. With a diverse portfolio, it’s less likely for a plan to experience massive losses in a short amount of time.

As you can see, a fiduciary is an extremely important role. By working in this role, a fiduciary is helping to make sure that a retirement plan performs well and remains valuable to those who are a part of it.