Does your company sponsor a qualified retirement plan such as a 401(k)? Are you aware of your responsibilities and associated risks? Does the word fiduciary mean anything to you? It should.

What is a fiduciary? Here’s one definition from the Consumer Financial Protection Bureau (www.cfpb.gov): “…someone who manages money or property for someone else. When you’re named a fiduciary and accept the role, you must – by law – manage the person’s money and property for their benefit, not yours.”

As the owner or other officer or board member of a company with the purview to choose a qualified retirement plan, plan advisors and associated investment options, you bear significant risks and responsibilities. You’re the fiduciary for that plan.

According to the IRS: “…a fiduciary is a person who owes a duty of care and trust to another and must act primarily for the benefit of the other in a particular activity. For retirement plans, the law defines the actions that result in fiduciary duties and the extent of those duties.” (https://www.irs.gov/retirement-plans/retirement-plan-fiduciary-responsibilities)

As sponsor and operator of a qualified retirement plan, you must make a number of fiduciary decisions. You may hire someone  — a financial advisor, for example — to act as a fiduciary. Hiring a fiduciary is a fiduciary act, so choose wisely.

Here are some other examples of fiduciary decisions and responsibilities:

Choosing investments that offer a full range of options to plan participants — your employees.

Following and complying with plan documents.

Carrying out plan duties with care, skill, prudence and diligence as a prudent person would.

Managing and defraying plan expenses.

Diversifying plan investment options.

Acting in the interests of  participants and their beneficiaries.

According to the IRS, fiduciary decisions are an essential part of managing and controlling a qualified retirement plan. Since you or someone you hire control or have discretion over plan assets, you’re a fiduciary to the extent of that discretion or control. Fiduciary status is based on the functions performed for the plan, not a title.

Not all plan decisions are fiduciary ones. Some are business decisions — whether to establish a plan, include certain features and amend or terminate a plan. According to the IRS, when you take steps to implement these decisions, you or those you hire act for the plan as a fiduciary.

If you decide to hire a service provider to manage your plan, you could limit some of your liability. You also could give employees control of the investments in their accounts.

Whatever choices you make, always put the best interests of plan participants, your employees, first.

Since qualified retirement plans can be complicated — and this article isn’t intended as financial, legal, tax or other advice — consult with the appropriate financial, legal and tax professionals.