What are the important retirement plan best practices, especially with monitoring and oversight?
Arnerich Massena asks and answers in its latest white paper, one in an ongoing series produced by the Portland, Oregon-based firm.
Specifically, it looks to investment performance, manager changes, the overall investment lineup and, of course, the all-important fees.
When monitoring plan providers, sponsors and advisors should ask themselves “if the service is continuing to meet the needs of your plan and participants? Is it a reasonable level of service for the cost? Are there services that you feel are lacking, or services that are not included but which participants might benefit from?”
The white paper is the fourth in a five-part series outlining retirement plan best practices; the series began with plan governance, plan design and investment menu construction, and will conclude by covering participant education.
“Maintaining an employer-sponsored retirement plan is an ongoing process, requiring dedicated attention and oversight,” it adds. “Monitoring your investment menu managers, your plan providers, and plan fees is an important part of your overall fiduciary responsibility.”
“Fiduciary liability often comes down to process more than outcome,” notes Terri Schwartz, managing director of institutional services and business development with the firm. “Having a thoughtful process in place, then following and documenting the process is the best way plan sponsors can demonstrate prudence. We have years of experience helping retirement plan sponsors monitor their plans and fulfill their fiduciary duties; we’re pleased to share our knowledge and experience in this paper.”
The paper notes that the act of monitoring itself demonstrates a degree of fiduciary prudence when the sponsor follows a well-documented process.
“Often, when plans fall short of their fiduciary responsibilities, it has less to do with outcome and more to do with failing to follow a process or maintain adequate documentation of such.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
