Are 401(k) fiduciaries personally liable for plan losses?

ERISA Section 409 puts personal assets on the line: a fiduciary who breaches their duties must make the plan whole for resulting losses, return any profits made through use of plan assets, and can face DOL civil penalties of 20% of recovered amounts.

The last two decades of excessive-fee litigation show what this looks like in practice — class actions over recordkeeping fees, share classes, and underperforming funds routinely name individual committee members alongside the employer.

The layered defense: a committee operating under a charter with documented, adviser-supported decisions; an ERISA fidelity bond (legally required, protects the plan); and fiduciary liability insurance (protects the people). Add indemnification from the company and most members are well protected — provided the process was real.