Different personalities and styles make for different retirement plan committee meetings, yet a survey by the Plan Sponsor Council of America identifies key consistencies in structure and approach.
They include:
- Most companies have at least one formal committee to oversee retirement plan administration, and many have two.
- While there is no specific list of job titles that always serve on committees, many companies do determine committee participation by job title, the most common criteria for selection, with expertise a close second.
- Most committees have between five and 10 participants.
- At least half of organizations, depending on plan size, also have legal counsel (internal or external) present during committee meetings.
- Committees most commonly meet quarterly across the board.
“Regardless of the committee structure chosen, having a documented prudent process in place remains the best practice—and shield against litigation—for retirement plan fiduciaries,” Nevin Adams, Chief Content Officer and Head of Research at the American Retirement Association, said in a statement.
Number of committees
Though the majority of respondents indicated that their company has one committee (63.9%), there is a wide variety in how those committees are structured. Not surprisingly, many factors are size correlated with larger organizations having not only more committees but more formalized/structured committees.
Formalized committees
Nearly 80% of respondents indicated that their organization has a document that formally establishes their plan committee(s), and nearly all large organizations do (93.5% of plans with 5,000 or more participants), though it’s much less common among smaller organizations (52.8% of plans with fewer than 200 participants).
Organizations are less likely to have a formal document that specifies which job positions serve on which committees (38.2% of plans). However, the size correlation also holds true here – twice as many (54.1%) large organizations have one than smaller organizations (26.4%).
Committee participation
Though the majority of committees have between five and ten participants, this is again size correlated. Very few organizations have more than ten participants per committee, and only large organizations do.
About two-thirds of organizations have legal counsel participate in committee meetings, though that’s the case among only half of organizations with fewer than 1,000 plan participants, in contrast to the 91.9% of organizations with more than 5,000 participants.