For plan committees and trustees
The standard is prudence. The evidence is the process.
ERISA §404(a) asks a plan fiduciary to act with the care, skill, prudence, and diligence of someone familiar with such matters, and the Department of Labor is explicit that prudence focuses on the process for making decisions. We help 401(k) and 403(b) committees and trustees build that process: an investment policy statement, a quarterly monitoring routine with written criteria, a fee review built from §408(b)(2) disclosures, minutes that show the reasoning, and training for the people who sit at the table.
The situation
Most committees are not chosen. They are assembled.
The owner, the controller, and someone from HR sign the adoption agreement, the recordkeeper loads a fund lineup, and the plan runs. Nobody explains that the signature made each of them a fiduciary, personally, with duties that ERISA measures against a professional standard rather than a good-faith one.
The standard is more workable than it sounds. In Tibble v. Edison (2015) the Supreme Court confirmed that a fiduciary has a continuing duty to monitor plan investments and remove imprudent ones, separate from the duty to choose them well at the start. In Hughes v. Northwestern (2022) it added that offering some sound options does not excuse keeping unsound ones, and in the same opinion it said courts must give due regard to the range of reasonable judgments a fiduciary may make. A committee that follows a written policy, meets on a schedule, and records why it decided what it decided is doing what the law asks.
That is the work on this page, and it is distinct from the plan-level investment consulting described on our 401(k) and retirement plans page. This page is about the committee itself: how it is constituted, what it has delegated and to whom, the policy it follows, the evidence it keeps, and the training that lets a new member sit down already knowing the job.
Why it’s complex
Five things a committee has to get right
Who is a fiduciary, and who only assumes they are not
ERISA defines a fiduciary by function: anyone with discretionary authority over plan management or plan assets, whatever their title. Trustees, committee members, and often the owner qualify. The recordkeeper and TPA usually do not, unless their contract says so. The first task is a written map of who holds which duty.
Plan-level investment consultingSelecting the menu is one duty; monitoring it is another
Tibble settled that the duty to monitor is separate from the duty to select. A fund chosen well a decade ago still has to earn its place each quarter against criteria the committee wrote down in advance. A watch list with entry and exit rules turns that from a debate into a procedure.
Diversified or overengineered?Reasonable fees are not the same as the lowest fees
Section 408(b)(2) requires every covered service provider expecting $1,000 or more to disclose its services, its fiduciary status, and its direct and indirect compensation before the contract begins. The committee’s job is to read those disclosures, compare total cost to the services received, and keep the comparison. Revenue sharing and share class are where the money hides.
Section 404(c) protects less than committees assume
When participants direct their own accounts, §404(c) relieves the fiduciaries of losses from those choices, provided the plan offers at least three diversified alternatives, accepts instructions at least quarterly, and delivers the required disclosures. The regulation says plainly that it does not relieve the duty to select and monitor the alternatives themselves.
The quiet member is still responsible
Under §405, a fiduciary who knows of another fiduciary’s breach and makes no reasonable effort to remedy it shares in it. Plan documents can allocate duties among fiduciaries, and a properly appointed investment manager can take on the investment decisions, but the appointment itself and the monitoring of the appointee remain with the committee.
Sources: 29 U.S.C. §1104 (ERISA §404); §1105 (ERISA §405); §1112 (ERISA §412); 29 CFR 2550.404c-1; 29 CFR 2550.408b-2; 29 CFR 2550.404a-5; DOL/EBSA, Meeting Your Fiduciary Responsibilities; Tibble v. Edison International, 575 U.S. 523 (2015); Hughes v. Northwestern University, 595 U.S. 170 (2022).
Our approach
Built in the order a committee needs it
We do not administer the plan, hold its assets, or draft its documents; the recordkeeper, the TPA, and ERISA counsel do that, and we coordinate with them. What we hold is the committee’s process: the policy, the monitoring, the fee review, the record, and the training. Where we act as a fiduciary to an ERISA plan we do so under ERISA, and our written agreement and §408(b)(2) disclosure state that status before the engagement begins.
Map the fiduciaries and what each has been delegated
We read the plan document, the trust agreement, the committee charter if one exists, and every service agreement, then write down who is the named fiduciary, who has discretion over what, and which functions the recordkeeper or TPA has accepted in writing. Most committees find at least one duty that nobody has been assigned.
Write an investment policy statement the committee can keep
ERISA does not require an IPS, but once one exists the committee is bound to follow it under §404(a)(1)(D). So the document promises only what the committee will do: the asset classes offered, the criteria for selecting and retaining funds, the watch-list rules, the policy for the default investment, and the review calendar.
Monitor against the criteria, not against the news
Every fund is scored on the IPS measures. Funds that miss go on the watch list with a dated reason; funds that leave it do so by the written rule. The committee reviews the default investment on its own, since many participants never move out of it. The minutes record the discussion as well as the vote.
Test fee reasonableness in writing
We collect the §408(b)(2) disclosures, build the total plan cost by service and by share class, identify any revenue sharing, and compare the result to a benchmark. The Department of Labor describes a formal review of service providers at reasonable intervals; we set the interval in the IPS and keep each comparison in the file. Participant fee disclosures under 29 CFR 2550.404a-5 are the recordkeeper’s to deliver, and we check that they went out.
Train the committee and keep the file
An annual session covers the duties, the year’s regulatory changes, and the plan’s own numbers; each new member gets the same session before their first vote. The fiduciary file holds the plan documents, the IPS, the disclosures, the minutes, the fidelity bond, and the training record, so the process can be shown rather than described.
The work
What you’ll work through with us
- A fiduciary map: who is a fiduciary, what each has been delegated, and where that is written
- A committee charter and an investment policy statement the committee will actually follow
- Quarterly investment monitoring reports scored to the IPS criteria, with a dated watch list
- An annual fee reasonableness review built from the §408(b)(2) disclosures and a benchmark
- Meeting agendas and minutes that record the reasoning, not only the decision
- A fiduciary file: plan documents, IPS, disclosures, minutes, bond, and training record in one place
- Annual fiduciary training for the committee, and an onboarding session for each new member
- Coordination with the recordkeeper, TPA, and ERISA counsel on the items that are theirs
Fiduciary consulting at the firm is led by Theo Halbardier, CFP®, CIMA®, CAIA®, the firm’s founder. The CIMA® curriculum covers investment policy, manager selection, and performance evaluation, which is the substance of a committee’s monitoring work. We are fee-only: no commissions, no product sales, and no revenue sharing from any fund company or provider. About Theo
Questions
Common questions from plan committees
Who is a fiduciary of our 401(k) plan?
Anyone who exercises discretionary authority over the plan’s management or its assets, or gives investment advice for a fee, whatever their title (ERISA §3(21)). That normally includes the trustees, the committee members, and the person who signs on behalf of the employer. The recordkeeper and TPA generally are not fiduciaries unless their contract says so; each provider’s §408(b)(2) disclosure must state its fiduciary status, which is the place to check.
What are the fiduciary responsibilities under ERISA?
Section 404(a)(1) sets four: act solely in the interest of participants and beneficiaries, for the exclusive purpose of providing benefits and paying reasonable expenses; act with the care, skill, prudence, and diligence of a prudent person familiar with such matters; diversify plan investments so as to minimize the risk of large losses; and follow the plan documents insofar as they are consistent with ERISA. The Department of Labor adds that prudence is judged on the process and advises documenting decisions and their basis.
How often should a 401(k) committee meet?
ERISA sets no number. The Department of Labor describes a formal review of service providers at reasonable intervals, and the continuing duty to monitor investments from Tibble implies a regular cycle. A quarterly investment review with an annual fee and plan review is the common cadence, and whatever the committee writes into its investment policy statement becomes the standard it is held to.
Does the plan need an investment policy statement?
ERISA does not require one, but a written policy is the clearest evidence that a process exists, and most committees adopt one. Two cautions: keep it specific enough to guide a decision, and promise only what the committee will do, because once adopted it is a plan document the committee must follow under §404(a)(1)(D). Ours run a few pages and are reviewed each year.
What does fee reasonableness mean?
That total compensation is reasonable for the services actually received, which is not the same as the lowest available price. Section 408(b)(2) requires each covered service provider expecting $1,000 or more to disclose its services and its direct and indirect compensation in advance, and to report changes within 60 days. The committee compares that total, including revenue sharing and share-class cost, to the market for similar plans and records the comparison.
Does section 404(c) protect the committee from investment losses?
Only from losses that result from participants’ own allocation choices, and only if the plan meets the conditions: at least three diversified investment alternatives with materially different risk and return characteristics, instructions accepted at least once in any three-month period, and the required participant disclosures. The regulation states that it does not relieve fiduciaries of the duty to prudently select and monitor the alternatives and service providers.
How are you paid, and do you take over the committee's duties?
Fees are set in the written engagement and disclosed at plan level before the engagement begins, as §408(b)(2) requires; we receive no commissions or revenue sharing from any fund company or provider. Whether we act as a fiduciary to the plan, and in what capacity, is stated in that agreement and disclosure. The committee keeps its own duties, including the duty to monitor us; our role is to make those duties easier to carry out and to evidence.
Do you handle plan documents, compliance testing, or the Form 5500?
No. Plan documents and amendments belong to the TPA and ERISA counsel, nondiscrimination testing and the Form 5500 to the TPA and recordkeeper, and custody of plan assets to the trustee or custodian. We coordinate with each of them and keep their deliverables in the fiduciary file, so the committee can see in one place that the work was done.
Reviewed by Theo Halbardier, CFP® · Updated September 2026 · Figures current for 2026
Tell us who sits on the committee.
The first conversation is 30 minutes. Bring the plan document and the last set of minutes if they exist; if they do not, that is a reasonable place to start.
Meet with us