Attention Plan Fiduciaries: Don’t Neglect Your Recordkeeping Responsibilities!

Who is a Fiduciary?

A fiduciary is someone who looks after another person's assets or money. When someone names you as a fiduciary, you are obligated by law to handle their assets for their benefit, not your own.

Offering a robust group health plan is one way in which employers can help to recruit and retain your employees and that is essential in the current climate.  While the initial implementation of a group health plan can be straightforward when you have someone like an experienced insurance broker to walk you through the process, there is a lot to maintain on an ongoing basis.

A very important part of the health plan itself is the plan fiduciary.  All plans are required to have a fiduciary.  The fiduciary acts in the best interest of the plan and the beneficiaries of the plan with the exclusive purpose of providing benefits to them.  The responsibilities of the fiduciary may include day to day administration of the plan, following the plan documents (unless inconsistent with ERISA), paying only reasonable plan expenses, recordkeeping, submission of required forms and reporting to government agencies.

The ERISA statute of limitations is 6 years, so it is recommended that employers maintain records for the previous 7 years.

The records should include the following for fully insured plans:

• Payroll records showing employee premium deductions
• Insurance billing statements showing a detailed summary of the premiums and what they are for
• Summary Plan Description
• A sample packet of all documents given at open enrollment and to new hires for each plan year
• This would include the enrollment /termination/change forms
• Summary of Benefits and Coverage (SBCs)
• Annual Notices Packet
• Marketplace Exchange Notice
• Any Summary of Material Modifications (SMM)
• Form 5500 and Summary Annual Report (SAR) if applicable
• All enrollment and termination forms completed by employees and beneficiaries
• Communications with employees with regards to the plan including rate information
• Record the dates that materials were given to employees at open enrollment, the dates open enrollment was held
• Record the dates that enrollment materials were given to each new hire, and the date the completed forms were returned

If an employer has a grandfathered plan, and wishes to maintain their grandfathered status they will need to maintain these same records stated above from March 23, 2010 moving forward, and also need to include the following:

• Premium percentage contribution showing employer and employee contributions for each plan year
• Plan summary showing the benefits for each year
• SBCs were not used until 2012, so the employer would need a simple benefit summary or Evidence of Coverage for 2010 and 2011.
• Enrollment census from March 23, 2010, showing at least one person enrolled in the plan
• Show evidence of the grandfathered model notice being distributed to participants and beneficiaries

Primary Responsibilities of the Plan Fiduciary


A key responsibility of the plan fiduciary is making sure that the plan offered is in the best interest of the plan beneficiaries, which includes how it impacts their pocketbooks.  A fiduciary is required to do their due diligence and make sure that plan assets are being spent responsibly and that the plan is not paying unreasonable fees.

To show that the fiduciary is completing this part of their responsibilities, records need to show the following:

• Plan renewals and marketing of alternate plan options for each plan year
• Notes regarding the renewal process and what led to the final plan decisions for each plan year
• Signed Broker Compensation Disclosure Agreement
• This is required for all new contracts dated after December 27, 2021 when this part of the  Consolidated Appropriation Act (CAA) was implemented
• Please note that while this comes from your broker, it is actually the fiduciary’s responsibility to have and keep on file as part of the due diligence process.  A fiduciary who fails to produce it during a plan audit by the DOL or EBSA could face penalties

While this list of records may seem lengthy, the key to managing it is to do it as you go.  Don’t put it off and try to compile it afterwards.  Create a system and stick to it.  There is nothing worse than getting an audit letter from the Department of Labor, Employee Benefits Securities Administration, or the Internal Revenue Service and having to scramble trying to find documents and records that they are asking for before the submission deadline.

The list of documents included in this article is not exhaustive and this article is not intended to be taken as legal advice.

If you have received an audit letter from one of the Agencies, contact your counsel for guidance.