New Year’s Checklist for Retirement Plan Stewards

A new year is the perfect time for retirement plan sponsors and fiduciaries to reflect on all aspects of their retirement plans. Below are some fundamental areas to focus on to promote good fiduciary, plan, and participant health in 2019 and beyond.

□ Boost participant savings rates. Are your employees saving enough? Analyze current participant balances and participation rates and compare them with historical participant benchmarks.

□ Take a fresh look at your plan’s design. When was the last time you put your plan’s design under the microscope? If it’s been more than a year or two, changes may be in order. Does the plan offer auto-features and an incentivizing matching contribution for your employees? Has the design of the plan kept up with the needs of business owners or key stakeholders?

□ Tighten up the process for investments. Creating an investment policy statement (IPS) is the starting point for investment committees and plan fiduciaries. The selection, analysis, and, if needed, replacement of the plan’s investments should follow the process in the IPS. Does the investment menu cover desired sectors and categories, as well as offer target-date fund options?

□ Audit plan fees and expenses. Ongoing expense monitoring and benchmarking are vital. Plan sponsors have a fiduciary responsibility to know whether fees charged to the plan by service providers are reasonable for the services they are rendering, and most industry experts recommend that formal benchmarking take place at least every two years.

□ Document. Maintaining a well-organized 401(k) file (either hard copy or digital) of important plan documents, vendor correspondence, contracts, forms, and agreements not only helps you meet ERISA record retention requirements, but it also helps prepare you for an audit.