Home » Resources » Fiduciary Responsibilities: Practical Considerations for Plan Sponsors
September 16, 2026
Managing an employee benefit plan is often one of many responsibilities competing for a plan sponsor’s attention. Between payroll, HR, benefits, and everything else that comes with running an organization, it’s easy to assume that once a retirement plan is established and the right service providers are in place, much of the work takes care of itself.
In reality, plan sponsors still play an important role in overseeing the plan and ensuring it operates as intended. Recordkeepers, third-party administrators (TPAs), retirement plan advisors, legal counsel, and other service providers may handle important pieces of the process, but having those providers in place does not eliminate the need for ongoing oversight.
For those serving in a fiduciary capacity, ERISA establishes important standards for how they carry out their responsibilities. Understanding those responsibilities, knowing who is responsible for what, and having processes in place to monitor the plan throughout the year can go a long way toward identifying issues before they become bigger problems.
Fiduciary status under ERISA generally depends on the functions a person performs for the plan, rather than simply their title. Those serving in a fiduciary capacity are expected to act solely in the interest of plan participants and beneficiaries and to carry out their responsibilities prudently.
Some of the key fiduciary responsibilities include:
These responsibilities are not limited to major decisions made once or twice a year. They show up in the day-to-day administration of a plan, which is why consistent processes and ongoing oversight matter.
One of the most important things a plan sponsor can do is understand where responsibilities sit among the internal team and the plan’s various service providers.
Depending on the plan, that team may include a recordkeeper or TPA, a retirement plan or investment advisor, ERISA counsel, a payroll provider, and a CPA firm with employee benefit plan experience.
Hiring experienced service providers can be an important part of managing a plan, but so is monitoring those relationships and making sure everyone understands their role.
From an auditor’s perspective, many of the issues we see don’t result from someone intentionally doing something wrong. Often, a process changed, responsibilities weren’t clearly defined, information wasn’t communicated between parties, or something simply wasn’t monitored consistently.
Strong internal controls, clearly defined responsibilities, and regular review can help plan sponsors identify those issues sooner.
Retirement plan requirements continue to evolve, and SECURE 2.0 is a good example of why ongoing fiduciary oversight matters. Combined with the original SECURE Act, it introduced numerous changes affecting retirement plans, with different provisions becoming effective at different times over several years.
For plan sponsors, the challenge isn’t simply knowing the rules have changed. It is keeping up with when those changes take effect, understanding how they affect the plan, and making sure the appropriate operational changes are implemented. As requirements evolve, existing procedures may need revisiting, roles and responsibilities with service providers may need clarification, and payroll or administrative systems may need updating.
Plan sponsors do not have to navigate those changes alone. Recordkeepers, TPAs, retirement plan advisors, ERISA counsel, and other professionals can help interpret and implement new requirements. But working with experienced service providers does not eliminate the plan sponsor’s responsibility to stay engaged and maintain appropriate oversight.
For many defined contribution retirement plans, required SECURE 2.0 amendments are due December 31, 2026, although deadlines may vary by plan type. That deadline is only one piece of the picture. Plans have already needed to operate under applicable provisions as they became effective, even if they adopt the corresponding written amendment later.
That distinction matters for governance. A plan document may not need to be formally amended until later, but plan sponsors still need processes in place to identify changes as they become effective and ensure the plan is administered accordingly.
Fiduciary responsibility can feel like a broad concept. In practice, it often comes down to having processes in place to monitor how a plan operates. Here are three areas that show what that can look like.
Eligibility has always been a key area for plan sponsors to monitor, and the changes involving long-term part-time (LTPT) employees are a good example of how evolving requirements can affect plan administration.
As these requirements changed, plan sponsors needed to consider how they tracked employee hours, identified eligible employees, and whether their payroll and administrative systems captured the information needed to apply the new rules.
The goal is not for plan sponsors to become experts on every new provision. It is to have a process for identifying changes, determining how they affect the plan, and working with the appropriate service providers to make the necessary operational adjustments.
Employee contributions must be deposited into the plan as soon as they can reasonably be segregated from the employer’s general assets. The 15th business day of the following month is an outside limit, not a general safe harbor. If contributions can be deposited sooner, they should be. Different safe-harbor provisions may apply to certain small plans.
One of the best ways to manage this area is to stay consistent. Establish a documented remittance process, limit unnecessary manual steps, and periodically compare payroll dates with the dates contributions were deposited into the plan.
If plan sponsors identify late contributions, they should work with their advisors to determine the appropriate correction based on the circumstances.
The process may seem routine, but that is exactly why it can be easy to overlook. A consistent process and regular monitoring can make a significant difference.
Forfeiture accounts can sometimes fall off a plan sponsor’s radar. How forfeitures may be used and when they must be allocated or applied depends on the terms of the plan document and applicable IRS requirements.
Plan sponsors should review forfeiture accounts periodically rather than letting balances accumulate without attention. IRS proposed guidance provides that forfeitures should be used no later than 12 months after the end of the plan year in which the forfeiture occurred. It’s also important to confirm that forfeitures are being used in a manner permitted by the plan document.
We often discuss this with clients during the audit process. When we see forfeiture balances continuing to grow, it gives us an opportunity to talk through how the account is managed and whether there are ways to improve the process going forward.
Regularly reviewing the forfeiture account with the plan’s TPA or other appropriate service provider can help identify potential issues and opportunities to administer the plan more effectively.
Fiduciary responsibility does not mean mistakes will never happen. What matters is having thoughtful processes in place, understanding who is responsible for what, staying informed as requirements change, and addressing issues when you identify them.
As auditors, we see firsthand the difference those practices can make. They can make the annual audit more efficient, but more importantly, they can help plan sponsors feel more confident about how their plan is being administered throughout the year.
If you have questions about your employee benefit plan audit or would like to talk through any of these areas, our Employee Benefit Plan team would be happy to help.
Smith + Howard’s Employee Benefit Plan professionals work with plan sponsors throughout the year, bringing specialized benefit plan experience to the audit process.
Our team works closely with clients to understand their plans, identify issues or areas that may need attention, and talk through what we’re seeing along the way.
If you have any questions and would like to connect with a team member please call 404-874-6244 or contact an advisor below.
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