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HANYS Benefit Services’ Ten New Year’s Resolutions for Plan Fiduciaries:

HANYS Benefit Services’ Ten New Year’s Resolutions for Plan Fiduciaries:


1) Keep all plan documents and related records.
HANYS Benefit Services recommends that you review the most recent version of your plan documents. Documents are often misplaced as human resource personnel change and computer systems are upgraded.

Complete a document checklist to make sure that all applicable documents are available and maintained. These include the Internal Revenue Service determination letter, plan amendments and notices, automatic enrollment notifications, and the summary annual report.
Service agreements and vendor contracts should be reviewed periodically to ensure all required services are being provided and agreed upon. Service agreements, such as the plan document, should be kept in both electronic and paper form.

2) Review ERISA bond and fiduciary liability insurance.
ERISA-covered retirement plans must maintain an ERISA bond to protect assets from theft and fraud. Maintain written proof of a current fidelity bond to meet this requirement. Also, review the fiduciary coverage in all directors and officers liability policies. Additional fiduciary insurance can be purchased for additional liability coverage for committee members who are not fully insured.

3) Hold Regular Retirement Plan Committee meetings.
Retirement plan committees should hold meetings at least annually; preferably quarterly. These meetings should review and evaluate the plan’s investment performance, the investment lineup, the investment managers, service providers, and any other relevant plan administrative matters.

4) Record minutes of all meetings and votes.
Minutes of all meetings should be maintained in the fiduciary file. Minutes should include an attendance list, all notes related to agenda items, and any decisions that were voted on during the meeting.

5) Review the administration of the plan versus the plan document.
A plan’s failure to operate in accordance with the provisions of the plan document is a common pitfall for plan sponsors. Review the plan’s provisions and determine whether the day-to-day operation is in compliance with the plan document.

6) Review and revise, if necessary, the plan’s Investment Policy Statement (IPS).
The IPS should establish guidelines and procedures for selecting, monitoring, and removing investment funds and managers. Review the IPS and revise as necessary to ensure investment decisions are made in a rational manner and to further the purpose of the plan and its funding policy.

7) Review and monitor plan expenses and fees.
Plan fiduciaries must be certain the plan’s covered service provider(s) furnishes all required fee disclosures on a timely basis and that fees are monitored regularly. Fiduciaries need to establish a policy for evaluating ongoing plan expenses and fee benchmarking.

8) If your plan has elected to use 404(c) fiduciary relief, review the compliance requirements and your internal procedures.
Plan sponsors frequently overlook maintaining compliance with ERISA’s Section 404(c) rules, which provide limited protection to fiduciaries of participant-directed individual account plans from fiduciary liability for participants’ investment losses provided that the plan complies with the requirements outlined in 404(c). A broad-based compliance audit that includes a careful review of the plan’s 404(c) procedures may be appropriate.

9) Conflicts of interest and independent consultant.
Plan sponsors should request letters from the plan’s fiduciaries and service providers disclosing any potential conflicts of interest and stating definitively if none exist. The plan sponsor can conduct an informal audit of the fiduciaries to uncover any possible conflicts of interest and ensure objectivity in all plan decisions. Reaffirm these statements annually―and for any new members with fiduciary responsibilities.

Be sure not to overlook your plan consultant, investment advisor, and third-party administrator in this review.  Make sure that you know how the various parties are receiving compensation for their services. Understand if any indirect compensation arrangements are in place and, if so, review to ensure the arrangement is reasonable.

10) Set goals for your retirement plan for 2014.
Establish goals and objectives for the coming year; document them; review them with management and your service providers, and monitor them periodically throughout the year. Strategic Benefit Services recommends keeping a “scorecard” progress report to measure how well these objectives are being met. Typical goals could be increasing participation at a specific location, setting up an e-mail campaign, or passing all applicable compliance tests.


How HANYS Benefit Services Can Help in 2014

Tackling the required due diligence on your plan can be daunting. HANYS Benefit Services can offer expertise to assist plan sponsors and plan fiduciaries in meeting their fiduciary responsibilities. Our Forensic Plan Audit will provide the framework to ensure you are meeting your fiduciary responsibilities, including development of an Investment Policy Statement, quarterly investment monitoring, and plan design review.

If you have questions about this article, or about fiduciary duties, contact us at (800) 388-1963 or at hbs@hanys.org.

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