If your organization sponsors a 401(k) or qualified retirement plan, then, as a plan trustee, you are legally responsible for the decision-making surrounding the plan.

These fiduciary duties are something many plan sponsors aren’t aware of. But even if trustees recognize them, they usually don’t understand what the responsibilities entail.

The fiduciary is tasked with running the retirement plan in the best interest of its participants — ensuring investments perform well relative to their benchmarks, and that fees follow industry standards. It’s the prudent man standard: You must do what is prudent for employees in the plan.

“I think the biggest difficulty is that most employers aren’t investment experts. They have little understanding of the 401(k) industry and its fee structures. As a fiduciary, it’s their job to make sure they are giving their employees the very best, but they have no education or understanding to take on that role,” says Daniel Halle, vice president and manager of Retirement Plan Advisors at Fragasso Financial Advisors .

Smart Business spoke with Halle about mitigating the risks of fiduciary duties.

Who typically serves as a trustee?

Many times the trustee who has fiduciary responsibility is the business owner, but in a corporate environment it could be more than one person like the owner, CFO and HR manager. With nonprofits, the board of directors and finance committee are often tasked with making decisions for the 401(k) or 403(b) plan.

If these fiduciaries don’t fulfill their duties, what problems can result?

As a fiduciary, you can be held personally liable for the decisions you make regarding the retirement plan. The Department of Labor or IRS likely won’t come after your personal assets unless you’ve done something illegal, but a former employee or group of employees may file a lawsuit. Those same employees could lodge a complaint with the Department of Labor.

The Department of Labor’s Employee Benefits Security Administration also is increasing retirement audits. This group, which has hired more personnel, would like to be in a position to audit every U.S. retirement plan every two years. And, these auditors will often find something wrong, which means paying fines and fees, and then going through a correction process.

How can trustees educate themselves to better understand fiduciary duties?

If you become a trustee or fiduciary and aren’t familiar with how to meet your responsibilities, at the very least, download the Department of Labor primer: Meeting Your Fiduciary Responsibilities .

Once you are familiar with what you need to do, consider whether you have the capability to do what the department is asking. A lack of knowledge is not an excuse.

Most people find they spend too much time trying to become an expert at something that doesn’t help the business. Instead, consider outsourcing it to an adviser willing to share that fiduciary liability with you, and who will help you mitigate it.

If you decide to outsource, how does it work?

It can sound like you’re adding another management layer, but often it’s a matter of redirecting the resources your plan was paying a broker to a registered investment adviser. Then, he or she not only acts as a fiduciary to the plan but also handles education, investment analysis and helps ensure all responsibilities are met.

What are other tips for mitigating liability?

Sit down with your adviser or broker at least annually to ensure plan investments are doing what they should be, according to your investment policy statement and investment benchmarks. Overall plan fees also should be examined to ensure they are reasonable. Then document that meeting.

Most importantly, if there are changes that need to be made, those changes must get initiated. If you find a problem and don’t take action, it can create more trouble than if you didn’t realize there was an issue.

Make sure you do everything you can. Look at the plan. Have an evaluation process. Fix problems. It’s not so much that you have the right or wrong investment. It’s what process did you use to help ensure that the offered investments meet their benchmarks as described in the investment policy statement, and then continually monitor those investments going forward.