August 17, 2023
As a plan sponsor, you have a fiduciary responsibility to act in the best interest of your plan participants and ensure prudent management of your plan. However, employer 401(k) plans have many moving parts and involve numerous decisions, which is a lot for one person to manage alone. Many plan sponsors decide to establish retirement plan committees to share responsibility for plan oversight, governance, and investment decisions. A committee helps you:
In this article, Meghan Hannon, CRPS®, Senior Retirement Plan Manager, outlines the responsibilities of a retirement plan committee, as well as best practices for establishing a committee that contributes to the success of your employer 401(k) plan.
Role of a Retirement Plan Committee
A retirement plan committee is typically formed by the employer and comprises a group of individuals responsible for the prudent management of the employer 401(k) plan. The committee’s primary function is to act as a fiduciary, making decisions in the best interest of plan participants and their beneficiaries. Its focus is to enhance the retirement experience for employees by offering a well-structured, diversified, and competitive employer 401(k) plan. Key responsibilities include:
Establishing an Effective Retirement Plan Committee
Several best practices help you establish a retirement plan committee that has the proper structure and the right committee members:
1. Create a charter that clearly defines the roles, policies and procedures your committee will follow. The charter also outlines criteria for selecting committee members and sets the frequency of committee meetings.
2. Select a diverse group of individuals, from all levels and backgrounds, to comprise your committee. Consider having an odd number of members for voting purposes.
3. Provide fiduciary training to committee members, so all members fully understand their duties and commitments.
4. Create schedules and meeting agendas to keep the committee on track and ensure important topics are addressed.
Helping You Get There…
A retirement plan committee’s responsibilities encompass a wide range of activities aimed at safeguarding the financial interests of plan participants. By diligently reviewing plan design, investment options, regulatory compliance, and participant education, the committee contributes to the overall success of the employer 401(k) plan and helps participants secure their financial futures.
An experienced retirement plan advisor can help you establish a retirement plan committee that effectively serves the needs of your employer 401(k) plan. To learn more about how our advisors help you get there, connect with us today.
Investment Advisory Services offered through Boulay Financial Advisors, LLC a SEC Registered Investment Advisor. Certain Third Party Money Management offered through Valmark Advisers, Inc. a SEC Registered Investment Advisor. Securities offered through Valmark Securities, Inc. Member FINRA, SIPC
Boulay PLLP and Boulay Financial Advisors, LLC are separate entities from Valmark Securities, Inc. and Valmark Advisers, Inc. Prime Global is not affiliated with Valmark Securities, Inc. and Valmark Advisers, Inc.
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