--- title: Understanding Settlors and Fiduciaries in Employee Benefit Plans description: "Under ERISA, there are 2 roles that individuals and organizations can play to these plans: the role of the settlor and the role of the fiduciary." image: https://blog.multnomahgroup.com/hubfs/review.png --- [![Multnomah Group](https://blog.multnomahgroup.com/hs-fs/hubfs/canoe/logo-color.png?width=415&name=logo-color.png "Multnomah Group")](https://www-multnomahgroup-com.sandbox.hs-sites.com) [Careers](https://www.multnomahgroup.com/careers) Follow Us: [![Contact Us](https://no-cache.hubspot.com/cta/default/309123/8ea0f5b0-6d32-4c0c-be03-e645ed736c36.png)](https://cta-redirect.hubspot.com/cta/redirect/309123/8ea0f5b0-6d32-4c0c-be03-e645ed736c36) # Understanding Settlors and Fiduciaries in Employee Benefit Plans August 27, 2024 **ERISA Overview**: The Employee Retirement Income Security Act of 1974 (ERISA) regulates employee benefit plans, including pension and 401(k) plans. Under ERISA, two key roles are defined: **Settlors** and **Fiduciaries**. **Settlors** - **Role**: Establish and fund the employee benefit plan. - **Responsibilities**: - **Examples**: **Fiduciaries** - **Role**: Manage and administer the employee benefit plan. - **Responsibilities**: - **Examples**: **Key Differences**: - **Settlors**: Focus on the initial setup and future funding levels., - **Fiduciaries**: Responsible for the ongoing management and a higher standard of care and liability. **Example**: A chief financial officer may act as a settlor when deciding on eligibility and employer contribution levels, and also serve on a retirement plan administration and investment committee making decisions regarding how the plan is operated and funded. **Risks**: Employees acting as both fiduciaries and settlors may face conflicts of interest when managing their various responsibilities. For instance, a settlor may have an obligation to the employer and its shareholders to freeze employer contributions to the plan. A fiduciary committee member would never have an obligation to do anything that wasn’t in the best interest of plan participants. **Best Practices**: - **Training**: Ensure that all fiduciaries receive proper training on their responsibilities and ERISA requirements. - **Documentation**: Keep thorough records of all decisions and actions taken in relation to the plan and in what context decisions are made. - **Regular Reviews**: Conduct regular reviews of the plan’s performance and compliance with legal requirements.   --- Multnomah Group is a registered investment adviser, registered with the Securities and Exchange Commission. Any information contained herein or on Multnomah Group’s website is provided for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Multnomah Group does not provide legal or tax advice. Any views expressed herein are those of the author(s) and not necessarily those of Multnomah Group or Multnomah Group’s clients. ### Subscribe To Our Blog [Contact](https://www.multnomahgroup.com/about-us/contact-us) [(888) 559-0159](tel:8885590159) [1155 SW Morrison Street, Ste 501, Portland, OR 97205](https://www.google.com/maps/place/1155+SW+Morrison+St+Suite+501,+Portland,+OR+97205) © 2026 Copyright Multnomah Group Inc.