Every ERISA plan has to have a “named” fiduciary who is the person responsible for plan administration. However, named fiduciaries are not the only fiduciaries of a plan--there are also “functional” fiduciaries. In other words, any person or entity who makes decisions regarding the management of the plan or plan assets is also a considered a fiduciary. So depending on the specific actions performed, TPAs, carriers, brokers or consultants might also be considered fiduciaries--but merely influencing decision making would not necessarily be enough to make an advisor a fiduciary.
With respect to ERISA plans, all fiduciaries must:
Act in participants’ and beneficiaries’ best interests (the duty of loyalty)
Only use any plan assets to pay benefits or reasonable plan administration expenses (the exclusive benefit rule)
Act with the same care, skill, prudence and diligence of a prudent person acting in a similar situation, who is also familiar with such matters (prudent expert test)
Minimize risk of large losses by diversifying plan investments (if applicable)
Follow the plan documents and plan terms (plan document rule)
A person who performs purely administrative functions (such as clerical duties that don’t require discretion) within guidelines set by other responsible persons wouldn’t be considered a fiduciary.
If a breach of duties causes plan losses or harm to participants, a fiduciary could be held personally liable. The DOL could also assess civil penalties for breaches of fiduciary duties. To avoid these consequences plans need to identify all named and functional fiduciaries and ensure they are following their duties under ERISA.