By John M. Browne III:

If you have chosen to offer a 401k Plan to your employees and enjoy the advantages that it offers, then you take on the responsibility of that plan. You can call it the Fiduciary Responsibility. Nothing explains this responsibility better than the Department of Labor’s web site on 401k Plans.

________________________________

"The fiduciary responsibilities cover the process used to carry out the plan functions rather than simply the end results. For example, if you or someone you hire makes the investment decisions for the plan, an investment does not have to be a “winner” if the fiduciary can demonstrate it was part of a prudent overall diversified investment portfolio for the plan. Since a fiduciary needs to carry out activities through a prudent process, you should document the decision-making process to demonstrate the rationale behind the decision at the time it was made."

_______source:_Department of Labor Website
 

The Department of Labor is clear: Fiduciary Responsibility is not about “results” but about “process”. In fact,
a recent law suit that was filed in
St Louis attempts to take advantage of the Achilles heel of 401k fiduciaries: a compliance and procedure, rather than
a value and results, driven approach to Due Diligence.

The responsibilities of 401k Fiduciaries have been well documented on the internet, including numerous white papers listing steps to reduce liability and why. 401k PRISM can provide a great portion of the due diligence process of choosing (and monitoring) appropriate investment vehicles. A first step in the process is the 401k PRISM Report Card to evaluate how your plan matches up to other 401k Plans in terms of investment offerings.