All qualified retirement plans are required under ERISA to have two types of fiduciaries. Watch the video to learn more.
Types of Fidicuiaries
The types of fiduciaries required for qualified retirement plans are a trustee and an administrator. In the ESOP context, very often the administrator of the ESOP is the ESOP administrative committee. Other times, it can be the corporation serving as the plan administrator. Under the statute, if a committee is not appointed to serve that function then that function will default to the corporation.
The trustee’s responsibilities are fairly obvious—to own the stock, to buy the stock, to sell the stock, and to value the stock. The ESOP administrative committee is responsible for the paperwork and compliance for running a retirement plan such as filing a Form 5500 and issuing benefit statements and summary plan descriptions. Administrative committees in ESOP companies will also often take on ESOP communication functions. This isn’t required by the statute, but is very necessary to adequately get people involved in the employee ownership culture.