Investment Fiduciary & non-owner W2 employee of plan sponsor?

[Guest Ohio-RIA]

I'm a registered investment advisor and also a W2 employee (not highly compensated) at a mortgage banker. We're looking to lower total plan costs by about 20% from current levels and institute an employee education program in making a change from the current plan provider.

Would I and/or the mortgage banker / plan sponsor be running afoul of ERISA in any way if I were a co-fiduciary for the 401k plan and receiving compensation from it? I am currently a participant in the plan but could discontinue if need be.

Any guidance would be greatly appreciated.

Thank you.

[ERISAnut]

Not necessarily, depending on who the compensation is paid from. Anyone can be a fiduciary. The employer will always be a fiduciary; and within that responsibility they may appoint other fiduciaries (i.e. you). Stated loosely, the term itself is merely anyone who exercises discretion or control over the administration of the plan (or assets).

Now what type of services are you proposing to render? Who is being proposed to pay the fee for these services? (If the plan is being proposed to pay the fee, then you are a dangerous person.) Also, as an employee of the employer (who is already fiduciary and likely plan administrator), your actions on behalf of the employer already has this employer bearing the risks of your actions. (Therefore, you are still a dangerous person).

But, give us some exact details. There are some strong individuals here that can dissect your situation and give you every angle to consider.

Also, please clarify whether you are a Registered Investment Advisor (RIA) or Investment Advisor Representative (IAR). Many individuals get this confused when taking the Series 66.