Strong Retirement Plan Committees

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At the 2024 PLANSPONSOR National Conference, experts emphasized the importance of organization, documentation, and flexibility for running effective retirement plan committees.

Key Insights

1. Committee Structure and Charter:
   • Julie Doran Stewart from Sentinel Group highlighted that the success of a committee depends on a clear process. A committee charter outlining roles and responsibilities helps. Having an odd number of voting members avoids tie votes. Permanent seats for HR and finance leaders, with rotating members from other departments, ensure broad representation.
2. Specialized Meetings:
   • Separate meetings for plan administration and investment decisions can be beneficial. This allows each group to focus on their expertise while keeping each other informed.
3. Involvement of Recordkeepers:
   • Including the plan’s recordkeeper in meetings can help address questions and new offerings. However, closed-door sessions are necessary for open discussions among committee members.

Documentation and Legal Considerations

1. Documentation Process:
   • Benjamin L. Grosz from Ivins Phillips & Barker stressed the need for detailed documentation. Proper recordkeeping ensures a good fiduciary process for audits or litigation and manages committee turnover. Keeping historical records helps new members understand past decisions.
2. Fiduciary Training:
   • Regular communication and fiduciary training are crucial. Judy Bobilya-Feher from Aunt Millie’s Bakeries noted that training helps members understand their obligations. Ongoing training during regular meetings keeps members updated on new topics and fiduciary responsibilities.

Committee Commitment and Training

1. Understanding Fiduciary Liability:
   • It's important for committee members to understand the fiduciary liability they assume. This is achieved through formal and ongoing training, which can be tailored to specific topics like managed accounts or collective investment trusts.
2. Coordination with Administrative Staff:
   • Involving payroll and benefits staff helps them understand the impact of plan decisions on payroll processes and system automation. This coordination ensures smooth implementation of changes.

Successful retirement plan committees are characterized by strong documentation, clear processes, regular training, and flexibility. These strategies help mitigate risks and ensure effective plan management.

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