FIDUCIARY (ERISA)
Back to GlossaryDefinition
A person or entity that has discretionary authority over a plan and must act solely in the interest of participants.
Summary
An ERISA fiduciary is someone who has control or influence over an employee benefit plan (like a 401(k) or pension) and is legally required to put the participants' interests above their own. Think of them as trustees who must make decisions that benefit the employees, not themselves or their employer. They have a legal duty of loyalty and prudence, meaning they must act carefully and solely for the benefit of plan participants and beneficiaries.
Usage Context
Understanding ERISA fiduciaries is crucial when studying employee benefits law, retirement plan administration, and corporate compliance responsibilities. This concept is fundamental to understanding how employee benefit plans are regulated and protected under federal law.
Common Confusions
- Thinking that only trustees are fiduciaries (many others can be fiduciaries based on their actions)
- Confusing ERISA fiduciaries with general fiduciaries in other legal contexts
- Assuming all plan service providers are automatically fiduciaries
- Not understanding that fiduciary status depends on function, not title
- Thinking employers can always prioritize company interests over participant interests
