Fiduciary Liability as a TPA

[HarleyBabe]

Situation is in order for me as a TPA to be able to perform certain tasks on one of the mutual fund websites for my clients which are clearly not fiduciary, the authorization I need to perform those tasks, will also give me the ability to allow a distribution. So, if a participant submitts a request online for a distribution and it needs authorization, my electronic sign on into the plan could be used to authorize the distribution if I so chose to do that. Although I would never do this, we always have Trustees sign on distributions, the option would be there. So, although we would never exercise this option, will that make us a fidicuary, and if so, what are my options. Can we get a letter from the Trustees stating that we are only allowed to perform certain tasks with the authorization power we need?

[Ron Snyder]

Does the document permit the trustee to delegate the authority to you that you would be able with that authorization? Typical documents permit investment advisors to be able to trade on behalf of the plan, and permit TPAs to perform administrative functions. However, if you are being delegated authority over plan assets, you would likely be deemed to be a fiduciary.

In your shoes, I would attempt to have the mutual fund group limit the access to only those activities you are being engaged for.