“Responsibilities for Retirement Plan Sponsors: A Guide for Government Officials”

– Governmental retirement plan sponsors are not subject to ERISA, but instead must turn to state legal sources such as state constitutional law or statutory law to determine fiduciary duties.
– Most state retirement systems have fiduciary guidance in their provisions, which usually focus on the state retirement system specifically.
– Other potential sources of fiduciary law for governmental retirement plan sponsors include enabling statutes for 403(b), 401(a), and 457(b) retirement plans, as well as the adoption of the Uniform Trust Code, the Uniform Fiduciaries Act, and the Uniform Prudent Investor Act at the state level.
– Common law, which comes from state judicial decisions, may also impose fiduciary responsibility on trusts and apply to retirement plans. – The terms “fiduciary” and “trustee” are generally interchangeable, both referencing the responsibility of managing trust assets.
– The Internal Revenue Code requires qualified retirement plans to hold plan assets in trust, but 403(b) plans only require a custodial account or annuity contract.
– Some states specify who is a fiduciary of its governmental plans, while others may not. State laws may also mirror ERISA fiduciary laws.
– Even if no state fiduciary law directly applies to a governmental plan, other state laws may impose liability for breaches such as breach of contract or negligence. – Fiduciary duties of governmental retirement plan sponsors are compared to an okapi – unusual at first glance but a mixture of familiar elements.
– Best practices for governmental plan fiduciary duties include becoming familiar with relevant laws, using ERISA as a best practice, knowing plan documents, using prudence and documenting decisions, having clear processes and procedures, and hiring professionals where appropriate.
– The Employee Benefits group at Bricker Graydon can assist with putting processes in place to ensure duties are met, and can provide fiduciary training for retirement plan sponsors and their committees.

https://www.brickergraydon.com/benefits-insights/unicorn-ostrich-or-okapi-fiduciary-duties-for-governmental-retirement-plan-sponsors