Running a benefit plan makes you a fiduciary.

What ERISA actually says about your liability

I walk every client through three short sections of federal law before we look at a policy.

• The standard you are judged by (29 U.S.C. 1104). A fiduciary must act solely in the interest of participants and beneficiaries, for the exclusive purpose of providing benefits and defraying reasonable expenses of administering the plan, and with the care, skill, prudence and diligence of a prudent person familiar with such matters. The fiduciary must also diversify plan investments to minimize the risk of large losses, unless it is clearly prudent not to, and follow the plan documents so far as they are consistent with ERISA.
• Personal liability (29 U.S.C. 1109). A fiduciary who breaches those duties is personally liable to make good to the plan any losses resulting from each breach and to restore any profits the fiduciary made through use of plan assets. A court can also order other equitable or remedial relief, including removal of the fiduciary.
• Liability for someone else's breach (29 U.S.C. 1105). You can be liable for a co-fiduciary's breach if you knowingly took part in it or knowingly tried to conceal it; if your own failure to meet the 1104 duties in carrying out your specific responsibilities enabled it; or if you knew of it and did not make reasonable efforts under the circumstances to remedy it.

First, fiduciary status comes from what you do, not your title: the Department of Labor says exercising discretion over plan administration or control over plan assets makes you a fiduciary to that extent, and hiring a service provider is itself a fiduciary function. Second, section 1109(b) says a fiduciary is not liable for a breach committed before becoming one or after ceasing to be one. When someone joins or leaves the committee, I want the application to reflect who served when.

Late 401(k) deposits and the self-correction route

Underwriters ask whether employee deferrals have ever been deposited late. The Department of Labor rule (29 CFR 2510.3-102) treats amounts withheld from wages as plan assets as of the earliest date they can reasonably be segregated from the employer's general assets. For a pension plan, that date can be no later than the 15th business day of the month following the month in which the amounts would otherwise have been payable to the participant in cash. That date is an outer limit, not the general rule.

Plans with fewer than 100 participants at the beginning of the plan year get a safe harbor: amounts deposited no later than the 7th business day after the day they were received by the employer or would otherwise have been payable to the participant in cash are treated as on time. The regulation calls the safe harbor an optional alternative method of compliance, not the exclusive one.

If deposits were late, the Voluntary Fiduciary Correction Program (VFCP), most recently updated effective March 17, 2025, is the DOL's program for correcting them. The update added a Self-Correction Component for delinquent participant contributions and loan repayments to pension plans:

• Available to plans of any size when lost earnings total $1,000 or less.
• The delinquent amounts must be remitted within 180 calendar days of the date they were withheld or received by the employer.
• Lost earnings are calculated with the online calculator, and the self-corrector pays any penalties, late fees and other charges.
• The self-corrector files an SCC Notice through EBSA's web tool, gives the SCC Retention Record Checklist and a penalty of perjury statement to the plan administrator to keep, and receives an email acknowledgment rather than a no-action letter.
• Neither the plan nor the self-corrector can be under investigation, as the VFCP defines it.

If contributions were late and corrected, send me the record of the correction.

Official sources

• 29 U.S.C. 1104 - Fiduciary duties (Cornell LII)
• 29 U.S.C. 1105 - Liability for breach of co-fiduciary (Cornell LII)
• 29 U.S.C. 1109 - Liability for breach of fiduciary duty (Cornell LII)
• 29 U.S.C. 1110 - Exculpatory provisions; insurance (Cornell LII)
• 29 CFR 2510.3-102 - Definition of plan assets, participant contributions (Cornell LII)
• 29 CFR 2550.408b-2 - General statutory exemption for services (Cornell LII)
• Voluntary Fiduciary Correction Program (U.S. DOL EBSA)
• Fact Sheet: Voluntary Fiduciary Correction Program (U.S. DOL EBSA)
• Meeting Your Fiduciary Responsibilities (U.S. DOL EBSA)