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Home > Resources > ESOP > Who Are ESOP Fiduciaries and What Are Their Responsibilities?

Who Are ESOP Fiduciaries and What Are Their Responsibilities?

November 4, 2020 by Employee Benefits Law Group

All qualified retirement plans are required under ERISA to have two types of fiduciaries. Watch the video to learn more.

 

Types of Fiduciaries

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.

Fiduciary Responsibilities

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. 

Filed Under: ESOP

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EDITOR’S NOTE: We did the best we could to make sure the information and advice in this article were current as of the date of posting to the web site. Because the laws and the government’s rules are changing all the time, you should check with us if you are unsure whether this material is still current. Of course, none of our articles are meant to serve as specific legal advice to you. If you would like that, please call us at (916) 357-5660.

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