Posted on by Jerome.Pfeffer


Pfeffer, Blog 1_cover image


In a recent Guardian Retirement Solutions study, one-third of the plan sponsors surveyed did not realize that they were plan fiduciaries.[1] That is a frightening statistic, especially considering that 92% of Americans fall short of retirement savings,[2] 60% of households have less than $25,000 in total savings and investments,[3] and the company’s retirement plan is the primary accumulation vehicle for most Americans.

To take this one step further, in 2014, the Employee Benefits Security Administration (EBSA), the government entity responsible for ensuring the integrity of the private employee benefit plan system, conducted over 3,928 investigations; and of those, 2,541 (64.7%) cases resulted in monetary payments for corrective actions. For the year, the department recovered approximately $600M in direct payments, which is an average employer fine of $236,000 per corrective plan.[4]

So, if you are a plan fiduciary, what can you do today to stay informed and compliant?  Below are 4 quick tips to begin the process of practicing plan governance and prudent oversight.

  1. Document, document, document

Document rationale and decisions related to fund selections and changes. If questions are asked years later as to why fund choices were made, the documentation will set forth and explain the logic behind the decisions.

  1. Organize

Establish an investment committee to review the current retirement plan and documents. Make sure roles are established and education is provided for committee members regarding their ERISA fiduciary responsibilities.


  1. Review & Evaluate

Establish a process for an ongoing review of funds and vendors to ensure that selections are aligned with the Investment Policy Statement (IPS). Vendor fees and other service providers under the plan should be reviewed, as well. Quarterly committee meetings are frequently most effective in gathering and evaluating plan components.  If the committee has questions on the information, consult an industry expert.  Areas of common questions include plan design, investments, provider services, and actuarial support.


  1. Monitor

Revisit the IPS annually to update as needed. Review the retirement readiness index of your plan participants.  Discuss fee benchmarking and plan costs for reasonableness.  And most importantly, remember that the goal of a company’s retirement plan is help employees successfully retire.


We feel that managing your company’s retirement plan is an extremely important role, because your decisions and actions impact the retirement success of all of your employees.

If you are unsure whether or not you are a plan fiduciary, we recommend that you read the Department of Labor’s (DOL) Meeting Your Fiduciary Responsibilities brochure and contact us with any questions.

For a complimentary investment committee checklist and for other best practices, please contact us today.

Thank you for reading!


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Securities and Advisory Services Offered Through LPL Financial A Registered Investment Adviser. Member FINRA / SIPC.

[1] Guardian’s Fiduciary Awareness Quiz Asks: “Do Plan Sponsors Understand Their Fiduciary Role?” Guardian Retirement Solutions. August 6, 2014. https://www.guardianlife.com/news/guardian%E2%80%99s-fiduciary-awareness-quiz-asks-%E2%80%9Cdo-plan-sponsors-understand-their-fiduciary-role%E2%80%9D

[2] Rhee, Nari, PhD. “The Retirement Savings Crisis (2013): Is It Worse Than We Think?” National Institute on Retirement Security. Nari Rhee, PhD, June 2013.

[3] EBRI.org, March 2012. No. 369. The 2012 Retirement Confidence Survey: Job Insecurity, Debt Weigh on Retirement Confidence, Savings. http://www.ebri.org/pdf/surveys/rcs/2012/EBRI_IB_03-2012_No369_RCS.pdf

[4] “EBSA Restores Over $599.7 Million to Employee Benefit Plans, Participants and Beneficiaries.” Fact sheet. Department of Labor. August 6, 2015.  http://www.dol.gov/ebsa/newsroom/fsFYagencyresults.html