401K for Prevailing Wage Workers: Who is a Fiduciary?

Why Should You Have a Fiduciary for 401K Plans

A 401k plan is the most renowned employer-sponsored retirement plan in the United States. 401k plans allow employees to save money by investing a part of their wages before taxes are taken out. With 401k plans, employees can control how their money is invested, with access to a spread of mutual funds, stocks, money market investments, and bonds. As an employer, you have to know what your responsibilities are when it comes to 401k plans, and what the basic rules are when managing assets for your employees.

Understanding the Fiduciary in a 401k Retirement Plan

A fiduciary is an individual or an organization who has the ethical and legal duty to act in the best interest of the principal when managing assets in a particular fund, like 401k plans. Here are some things you should know about fiduciaries, their significance, and their responsibilities in handling 401k plans:

  • Fiduciaries Must Know the Necessary Elements of a 401k Retirement Plan

A plan managed by a fiduciary must have certain elements before it can be considered legitimate.

First, the benefits structure and guide for the daily operations must be written. A trust fund must be established to hold the assets of the plan.

To track the flow of the money going in and out of the employee’s retirement plan, a record-keeping system must also be established.

Lastly, documents that contain plan information must be provided to the government and participating employees.

  • Why the Role of a Fiduciary is Important for Prevailing Wage Contractors

As a fiduciary, we have an important role to fulfill on behalf of your employees and their retirement plans. Fiduciaries like ARCHER JORDAN have to act only in the interest of the employees, and must not benefit from the plan at all, unless stated otherwise by the principal. They should carry out your duties prudently, and follow the plan documents by the book. They must also try to diversify the plan investments in order to improve the 401k plan. They should only pay plan expenses that are within reason.

The role of a fiduciary requires the highest standard or care. The fate of the workers’ post retirement, as well as their subsequent retirement business plans or investment opportunities, all rely on the fiduciary duty to carry out the work responsibly. It is necessary that they understand the role as a fiduciary, and know how to effectively execute the job.

ARCHER JORDAN Can Help with the 401k Plans of your Prevailing Wage Workers  

Since the role of a fiduciary requires great knowledge and prudence, it is important that you know when to seek the help of trusted service providers. ARCHER JORDAN has had years of experience as a service administrator, and we can definitely help you ease your worries by being a trusted fiduciary.

To know more about ARCHER JORDAN and our services, contact us today.

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