Department of Labor regulations that went into effect in January of 2009 demonstrated one clear message: 403(b) plans are no longer avoiding the scrutiny of the federal government. Because an increasingly strict regulatory environment in the 403(b) arena heightens the importance of fiduciary oversight, all plan sponsors must ensure that they fully understand their responsibilities.
Some 403(b) plan sponsors believe that if they are exempt from ERISA, they cannot be held accountable as an acting-fiduciary. This is a misconception. While it is true that ERISAs mandated fiduciary duties do not govern ERISA-exempt plans, many state laws impose fiduciary standards similar to those of ERISA, and the escalation of regulatory pressures only underscores the accountability of the fiduciary. Therefore, all 403(b) plan sponsors, whether ERISA-exempt or not, should take care to understand and meet their fiduciary responsibilities.
