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True or False: Hiring a third-party fiduciary allows a plan sponsor to eliminate all fiduciary responsibilities.
True
False
Conditional
Dependent on the contract
The correct answer is: False
The correct answer is that it is false to say that hiring a third-party fiduciary allows a plan sponsor to eliminate all fiduciary responsibilities. While bringing in a third-party fiduciary can help the plan sponsor delegate some of the fiduciary duties and share the responsibility for managing the plan, it does not completely absolve the plan sponsor of their fiduciary obligations. Plan sponsors maintain some level of responsibility regardless of whether they hire a third-party fiduciary. For instance, they still must conduct due diligence in selecting the fiduciary and monitor their performance over time to ensure that their actions align with the best interests of the plan participants. Additionally, plan sponsors are ultimately responsible for ensuring compliance with applicable laws and regulations regarding the plan. Thus, while third-party fiduciaries can help manage specific functions and reduce the burden of fiduciary duties, they do not eliminate the overall fiduciary responsibilities that the plan sponsor carries.