Reducing Fiduciary Risk in 401(k) Plans

Fiduciary liability is one of the biggest risks in offering a 401(k). Discover how pooled employer plans (PEPs) shift the burden and protect employers.

Understanding Fiduciary Risk

One of the biggest concerns employers face when sponsoring a 401(k) plan is fiduciary liability.

Many don’t realize that offering a retirement plan creates a legal duty under ERISA to act solely in the best interest of employees. This includes:

Ensuring fees are reasonable
Monitoring investments prudently
Meeting strict reporting requirements

Failing to meet these obligations can result in audits, penalties, or even lawsuits — and liability can extend to business owners and executives personally.

The Real Risks for Employers

The risks of fiduciary missteps are significant. Employers may face:

Regulatory penalties from the Department of Labor (DOL) or IRS
Litigation from employees who believe poor oversight harmed their retirement savings

For small and mid-sized businesses without dedicated compliance teams, managing fiduciary responsibilities in-house can be daunting.

How PEPs Reduce Employer Liability

Fortunately, structures like the Pooled Employer Plan (PEP) offer a solution.

In a PEP:

The Pooled Plan Provider (PPP) and its fiduciary partners assume most fiduciary responsibility.
Employers retain plan design flexibility (eligibility, vesting, match structure).
Compliance, filings, and oversight are offloaded to experts.

By joining a PEP, businesses dramatically reduce liability while still providing employees with a strong, competitive retirement benefit.

Apex Consulting’s Fiduciary Support

At Apex Consulting, we serve as fiduciary partners by delivering:

Full ERISA compliance oversight
Independent investment selection
Transparent fee monitoring
Handling of annual filings and audits

With Ameritas as recordkeeper and Schwab as custodian, we ensure each plan is administered properly and always in the best interest of participants.

Employers gain peace of mind knowing the legal and fiduciary weight of plan management is carried by experts.

Less Risk, More Peace of Mind

Fiduciary risk doesn’t have to keep business owners up at night.

By leveraging the PEP model, companies can:

Shift liability
Strengthen compliance
Provide employees with greater retirement security

The result is less risk, more peace of mind, and a benefits package that positions employers as leaders in caring for their workforce.