South Carolina Life and Health Practice Exam

Under ERISA, a fiduciary is defined as someone who...

1. Manages company affairs

2. Has control over a plan's assets

3. Develops employee handbooks

4. Conducts job interviews

The correct answer is: Has control over a plan's assets

A fiduciary under the Employee Retirement Income Security Act (ERISA) is defined as someone who has the authority or control over a plan's assets. This includes both the responsibility for managing the assets of the plan and the duty to act in the best interests of the participants and beneficiaries. The role of a fiduciary involves decision-making authority regarding investments, financial transactions, and administration of the employee benefit plan. This designation is critical because fiduciaries are held to a high standard of care in fulfilling their responsibilities, and they must avoid conflicts of interest while acting prudently in the management of plan assets. The fiduciary must ensure the plan's compliance with ERISA regulations and must act with loyalty, prudence, and a keen focus on the participants' needs. The other options, while related to various aspects of corporate or employee management, do not directly pertain to the specific responsibilities or definitions surrounding fiduciary duty under ERISA. Therefore, being someone with control over a plan's assets is the key defining feature of a fiduciary.