Understanding Your Responsibilities as a 401(k) Plan Sponsor
Running a retirement plan involves ongoing oversight. Knowing who makes decisions, who provides advice, and who monitors the providers helps an employer organize the work.
October 12, 2026
A retirement plan needs attention after the adoption agreement is signed. Payroll contributions, investment oversight, employee communications, and provider services each require someone to take responsibility.
For an employer, a useful starting point is to document who handles those duties and how their work is reviewed. Your plan's agreements and operating procedures should support that division of responsibility.
Identify the Decisions That Carry Fiduciary Duties
The federal Employee Retirement Income Security Act of 1974 (ERISA) governs many private-sector retirement plans. Fiduciary status depends on the functions a person performs, including certain discretionary decisions and investment advice. It does not arise solely from a title, and not every business decision about a plan is a fiduciary act.
Core duties include acting for participants and beneficiaries, using a prudent process, following applicable plan documents, and considering reasonable expenses and diversification.
Ask your plan professional to explain which responsibilities apply to your role. A clear understanding helps the committee recognize when a decision needs advice or documentation.
Keep the Oversight Process Usable
Document how providers are selected and reviewed. Agreements should identify the services, compensation, and authority involved. Fees need to be considered in relation to the services provided.
Keep records of committee decisions and the reasons for them. If the plan uses an investment policy statement, make sure the people reviewing investments understand and follow the applicable policy.
A calendar can help coordinate reviews, but a scheduled meeting is only useful when concerns receive follow-up. Assign each action to a responsible person and confirm that it is completed.
Understand the Investment Professional's Role
A 3(21) investment advisor can provide recommendations while the responsible plan fiduciary retains investment decisions. A 3(38) investment manager can accept discretionary investment authority under a qualifying appointment.
The scope depends on the arrangement. Hiring a professional does not transfer every plan duty or remove the obligation to select and monitor that professional prudently.
Read the written agreement with the appropriate advisor or counsel. Confirm who can change the investment lineup, who monitors the manager, and what information the committee receives.
Coordinate Payroll and Plan Administration
Employee contributions must be transferred within applicable timing requirements. Confirm the process with payroll and the recordkeeper, including how missed or late contributions are identified and addressed.
Eligibility and enrollment procedures also require attention. SECURE 2.0 changed automatic-enrollment and long-term part-time participation rules for affected plans. Exceptions and implementation details make plan-specific review important.
Ask the third-party administrator to confirm how current requirements apply to your plan. Compare that guidance with the actual payroll setup, employee notices, and enrollment process.
Make Information Accessible to Employees
Employee education helps participants understand the plan and find assistance. Consider the locations, languages, and schedules of the people eligible to participate.
Give employees a clear route for questions about enrollment, account access, beneficiaries, and distributions. Explain which provider handles each request and how unresolved questions are escalated.
Education supports the plan's operation, but it should not be presented as a substitute for required disclosures or fiduciary oversight.
What This Means For You
- Document the duties assigned to your staff and providers.
- Review the scope of investment advice or management in writing.
- Confirm that payroll and eligibility procedures reflect current requirements.
- Follow up on committee decisions and participant-service concerns.
The professionals at 401(k) Specialists, a division of Thiesen Dueker Modern Wealth Management, provide sponsors plan-level support, investment oversight, enrollment and education assistance, and participant support services. Plan sponsors may contract with the professionals at 401(k) Specialists to handle any or all of these service categories for them. The team is able to work with sponsors' existing recordkeepers and third-party administrators, acting as the liaison for employers and their plan participants. The professionals at 401(k) Specialists offer participant education meetings in English and Spanish when requested.
To discuss your plan responsibilities or ask questions, visit thiesendueker.com/401kspecialists or call (559) 777-2720.
Frequently Asked Questions
Is every person working on a retirement plan a fiduciary?
No. Fiduciary status depends on the functions performed, such as exercising discretion over the plan or its assets. A job title alone does not determine it.
What is the difference between 3(21) advice and a 3(38) manager?
A 3(21) investment-advice arrangement generally leaves investment decisions with the responsible plan fiduciary. A properly appointed 3(38) investment manager has discretion within its agreed mandate. The appointing fiduciary retains selection and monitoring duties.
Does hiring a provider end the employer's oversight?
No. Hiring and monitoring the provider are fiduciary responsibilities. Review the agreement to establish the services, authority, and responsibilities involved.
This information is not intended as authoritative guidance or tax or legal advice. You should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.
Sources
- https:/
/ www. dol. gov/ sites/ dolgov/ files/ EBSA/ about- ebsa/ our- activities/ resource- center/ publications/ meeting- your- fiduciary- responsibilities. pdf - https:/
/ www. dol. gov/ agencies/ ebsa/ employers- and- advisers/ small- business- owners/ working- with- service- providers - https:/
/ www. irs. gov/ forms- pubs/ notice- 2024- 2- miscellaneous- changes- under- the- secure- 2- point- 0- act- of- 2022
Important Disclosures
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC.
This information is not intended to be a substitute for specific individualized legal advice. We suggest that you discuss your specific situation with a qualified legal advisor.
This material was prepared for Thiesen Dueker's use.
Information for employers, HR teams, and plan committees responsible for a company retirement plan.
Explore More Topics
Talk With an Advisor
To discuss how this applies to you, call (559) 448-8190.