In some instances, the law recognizes that one party has superior knowledge and control of another party's assets and labels the superior party as a "fiduciary." And so, when a party has control or manages the assets held in a retirement plan for the benefit of a participant, ERISA characterizes the manager as an ERISA fiduciary - one with the duty to act with strict honesty and candor solely in the interest of the participants. The duty, often referred to as the "highest duty known to law," places a significant burden on a fiduciary.

Historically, the Internal Revenue Code has required that the assets of retirement plans be held in trust to be managed for the exclusive benefit of the employees and their beneficiaries, and not be diverted for purposes other than the exclusive benefit of the employees before satisfaction of all liabilities to participants and beneficiaries. The Labor Management Relations Act of 1947 which governs "Taft-Hartley" plans likewise provides that retirement plan assets be held for the sole and exclusive benefit of the employees and their families and dependants. In 1954, Congress extended the prohibited transactions rules governing exempt organizations to qualified plans and created "fences" between retirement plan assets and a related person - any person who might otherwise deal with retirement plan assets to the detriment of the plan participants.

As the number of retirement plans and their assets increased, Congress enacted ERISA then incorporated, but did not displace, fiduciary requirements imposed under earlier federal legislation.