It's a complicated job.

If you own a business, you may have been named as the trustee of the retirement plan when it was established. The trustee is responsible, in short, for just about everything. In the 401K sense, that trustee is not responsible for selecting the investments for each and every participant. But that trustee is responsible for selecting the investment options that are available to employees.

Before we get too deep into the other roles and responsibilities of the trustee, in general it makes sense for owners of companies who may be trustees to either forgo that role or consider adding a cofiduciary to assist with some of the administrative minutiae. As trustee, you must make sure that the plan is administered in accordance with the plan documents that govern that plan.

As the trustee, you are the plan fiduciary. As the fiduciary, you must act in accordance with the standard of care of the prudent man theory. That theory states that your actions must be conducted like someone acting in that capacity who is familiar with such matters.

That may begin with your selection of the investment options within the plan. It is the trustee’s responsibility to be sure that all asset classes are included and that the plan investment choices offers participants the option to widely diversify their holdings and having a place for the conservative investor to avoid or minimize the possibility of loss. As a result, it is imperative that plan trustees either hire someone to assist with the investment choices offered or do the work yourself.

Doing the work yourself would include a detailed fiduciary review looking at all relevant factors. These may include internal expenses, relative performance, manager tenure, firm issues, style drift and a host of others. In my experience, most people don’t do this well for themselves.

These reviews should be documented. While no change is certainly a possibility, a pattern of never changing it up may lead a regulator to feel that the fiduciary isn’t quite holding their own. Other evidence of this may be when one of your investment choices is no longer accepting new contributions.

Sometimes managers simply close up, merge or sell their business which would make the prior offering unavailable – and in need of replacement.

Trustees are often the person responsible for managing participant loans. These loans must be adequately secured, bear a reasonable rate of interest, made in accordance within the plan provisions and loans must be available to all participants on a reasonably equivalent basis. As trustee you must establish a process for applying for a participant loan and document your criteria for approval or not.

One can limit their trustee liability with a few actions. Consider fiduciary liability insurance. Delegate the fiduciary part of the investment process to a professional – making them a cofiduciary is even better. Have other professional firms involved such as a plan administrator, actuary or attorney. And last, make sure that you have meetings to review the plan and document the content of those meetings.