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COLLECTED WISDOM™ for Plan, Retirement, and Investment Committees

Most would agree the plan fiduciaries must establish investment and plan committees that will clearly define a process of plan administration. However, the only thing worse than not having a committee is having one that doesn't know what it's doing or never follows its own rules. Learn more from these resources.

This archive contains not only the most current material on the topic, but also older items that are still relevant, provide background, perspective or are germane to the topic.

If you find a broken link or an items that you feel is outdate, irrelevant or no longer appropriate, please let us know.

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Other topical areas you may find of interest that are not fully covered here include ERISA 404(c) Compliance and Fiduciary Duty and Fiduciary Responsibility and Liability Issues.

Why Your Retirement Committee Needs to Take Meeting Minutes

Abstract: It's been said that the DOL and Courts take the position that "if it wasn't documented, it didn't happen." In the case of ERISA, the best defense for retirement committees is always a strong offense which means taking a proactive approach to implementing a comprehensive fiduciary governance process. One of the cornerstone practices to demonstrate that the retirement committee has made prudent decisions as required by ERISA is to take official minutes at each meeting.

Source: Greenspringadvisors.com, February 2019

Strategies and Tips for a Well-Run Retirement Plan Committee

Abstract: An organized and effective retirement plan committee forms the essential foundation for a sound fiduciary process, meaning a process that plan fiduciaries can be proud of and that will stand up to scrutiny. The most effective committees commit to an approach that emphasizes both committee engagement and adherence to a disciplined process. This 4-page article reviews some best practices that consistently lead to high functioning retirement plan committees.

Source: Fiallc.com, February 2019

EBSA Guidance on Environment, Social, and Governance Factors for Plan Fiduciaries

Abstract: In recent years, there has been an increase in considering environmental, social, and governance criteria when it comes to investing. However, not all investors agree that ESG factors should be considered when identifying prudent investments. The Department of Labor recently put out a bulletin that clarified how ESG criteria can be used by plan fiduciaries in making investments.

Source: Bsllp.com, February 2019

The Importance of Fiduciary Training for Retirement Plan Committees

Abstract: One of the most important things a company can do to properly equip its retirement plan committee members is to provide comprehensive fiduciary training. It's an important step to minimize fiduciary risk through education and governance. Furthermore, the DOL views fiduciary training as a critical element of prudent oversight and is increasingly looking for evidence that fiduciary training has been provided during plan audits. Unfortunately, formal fiduciary training is still not very common within the industry.

Source: Greenspringadvisors.com, January 2019

You Have a Retirement Plan Committee, but Do You Have a Committee Charter?

Abstract: Retirement plan committees (which are sometimes broken down into separate committees such as an investment committee and/or an administrative committee) serve an important function to ensure that the plan fiduciaries fulfill their responsibilities. While most plan sponsors utilize these committees, not all have adopted a formal committee charter. So, what does a good committee charter include? Here are some of the key elements.

Source: Cammackretirement.com, January 2019

Developing a High-Performance Retirement Plan Committee

Abstract: A well-organized and effective retirement plan committee is the cornerstone of successful fiduciary decision-making and organizational risk management for plans of any size. However, great committees do not happen by accident, they are the product of a "best practices" approach to design and implementation. Listed here are eight simple steps any company can implement to make its committee more effective.

Source: Greenspringadvisors.com, January 2019

The Do's and Don'ts of Your 401k Fund Lineup

Abstract: This short article shares a number of do's and don'ts when it comes to your 401k plan fund menu.

Source: Conradsiegel.com, January 2019

401k Fiduciary Lawsuit Highlights Fee Benchmarking

Abstract: Many 401k fiduciary lawsuits have focused on fees including, their reasonableness, their necessity, and whether the fees are being assessed for funds and services add value and help participants achieve their retirement goals. How often do you check up on your retirement plan fees? Investment committees need to be aware of their fiduciary duties and remain vigilant in carrying them out.

Source: 401ktv.com, December 2018

Investment Selection and Monitoring Process: A Primer

Abstract: Ongoing due diligence and research are a necessity, even for funds that are performing well. In the end, retirement plans should aim to utilize investment strategies that are disciplined and focused on delivering results in the long run. These are the strategies most compatible with the investment goals of retirement savers.

Source: Cammackretirement.com, November 2018

401k Sponsors in Serious Need of Fiduciary Training

Abstract: There is not a legal requirement that committee members receive fiduciary training. Instead, it's a best practice and good risk management. But, what should the fiduciary education cover? Based on an analysis of court decisions on fiduciary responsibility, Fred Reish worries that fiduciaries may not be adequately educated about their basic responsibilities and particularly their administrative oversight duties.

Source: 401kspecialistmag.com, November 2018

How Do Fees Affect Plans' Ability to Beat Their Benchmarks?

Abstract: Plans compare their returns by asset class to selected benchmarks that reflect their investment goals for the asset class. Plans pay fees to external asset managers with the expectation that the managers will exceed these benchmarks. As such, this paper focuses on the benchmarks to assess the role of fees. The question is whether higher fees help or hinder the ability for a plan to outperform its chosen benchmarks.

Source: Bc.edu, October 2018

Can Your 401k Plan Include Socially Responsible Investments?

Abstract: Socially responsible investing includes funds that take environmental, social and governance factors into account when selecting the fund's underlying investments. They are often referred to as ESG Funds. Studies show that millennials want socially responsible investments. This article discusses what you should consider.

Source: 401ktv.com, September 2018

8th Circuit Sets High Bar for Labeling Retirement Plan Investments "Imprudent"

Abstract: In Meiners v. Wells Fargo & Company, the U.S. Court of Appeals for the Eighth Circuit clarified the burden plaintiffs must meet to state a claim for breach of fiduciary duty under ERISA based on the inclusion of allegedly underperforming and expensive investment funds. Because plaintiffs often lack detailed information about the process plan fiduciaries followed to make investment choices, pleading a plausible claim that those fiduciaries have acted imprudently can pose a significant challenge.

Source: Kslaw.com, August 2018

The Importance of Educating Investment Committees

Abstract: Plansponsor's National Conference featured a session on investment committee education, the basics surrounding it, and the best resources available to plan sponsors. Two retirement industry professionals reviewed best practices for investment committee members.

Source: Plansponsor.com, June 2018

Considering Customized Investment Options in a DC Plan

Abstract: As DC plans represent a growing share of workers' retirement nest eggs, plan sponsors and consultants may be considering customized investment options for their DC plan investment menus. This 12-page paper discusses the potential benefits and drawbacks of including nonstandard investment options, particularly white-label funds, in a 401k plan.

Source: Vanguard.com, June 2018

Trends in the Expenses and Fees of Funds

Abstract: Fund expenses cover portfolio management, fund administration and compliance, shareholder services, recordkeeping, certain kinds of distribution charges, and other operating costs. This ICI study found that, on average, fund expenses for long-term mutual funds have declined substantially for more than 20 years.

Source: Ici.org, April 2018

Labor Department Says ESG investments Aren't Always "Prudent"

Abstract: The Trump administration unveiled guidance aimed at the burgeoning socially responsible investment industry that left some investors scratching their heads. The Department of Labor, which oversees retirement-plan funds, published guidelines that said investments based on environmental, social and governance issues aren't always a "prudent choice" and that such factors shouldn't "too readily" be considered as economically relevant by fiduciaries.

Source: Investmentnews.com (registration may be required), April 2018

Best Practices for Fund Replacements to Keep You in Compliance

Abstract: Like good design, people know a good fiduciary process when they see it. When replacing a poorly performing investment in a fiduciary account, follow these best practices to ensure fiduciary compliance.

Source: Fi360.com, March 2018

Becoming a Retirement Plan Committee Member

Abstract: When a person is appointed or is being sought to be member of a retirement plan committee, the natural question is to understand exactly what the person is committing to. Simply stated, a committee member is a fiduciary, who is expected to always act on behalf of plan participants, using the care of a person familiar with retirement plans and investments. This article covers the specifics on the role and responsibilities of being a fiduciary.

Source: Planpilot.com, March 2018

Investment Committees Misnamed Causing Confusion by 401k and 403b Plan Sponsors

Abstract: Traditionally, the governing committee for 401k and 403b plans have been called "investment committees" which can cause confusion and might even be harmful. They should be called "retirement committees" or even "benefits committees." Here's why.

Source: 401ktv.com, February 2018

The Plan Committee: Common Problems

Abstract: The author reviews a few key problems he has seen over the years in the operation of retirement plan committees.

Source: Fiduciaryplangovernance.com, February 2018

The Plan Committee: Appointing and Removing Committee Members

Abstract: This is an aspect of committees where there is generally a woeful lack of understanding of the commitment that is being made. This article discusses making a committee position offer (what plan sponsors should be thinking about), formalizing appointments, removals, and resignations.

Source: Fiduciaryplangovernance.com, January 2018

The Plan Committee: The Life Phases of a Committee Meeting

Abstract: When considering committee meetings, it's a mistake to think only about the time spent in the meeting itself. In fact, this time is by far the least important part of a committee meeting. In fact, meetings start well before the meeting itself and end well after it.

Source: Fiduciaryplangovernance.com, January 2018

What Are Plan Committees Responsible For?

Abstract: Committees serve at the pleasure of an appointing entity, usually a board of directors that gives them discretionary authority over key aspects of plan operations, investments, and administration. Committees are accountable to that appointing entity for their actions.

Source: Fiduciaryplangovernance.com, January 2018

The Plan Committee: Should You Have One?

Abstract: Plan sponsors are not legally compelled to set up committees. Most standardized plan documents give plan sponsors the flexibility to set one up or not. But just because you are not required to do something doesn't mean it's not a good idea.

Source: Fiduciaryplangovernance.com, January 2018

More Advisers Expect Increased ESG Demand

Abstract: More than one-third, 35%, of asset managers have made the introduction of environmental, social and governance (ESG) investing a high priority, and another 57% say they are placing a moderate level of priority on the task. Together, this makes for a full 92% of asset managers on the path to or considering offering ESG investing options, according to the December issue of The Cerulli Edge.

Source: Planadviser.com, December 2017

Best Practices - Investment Menu Construction

Abstract: How can plan sponsors build an investment menu that will facilitate improved long-term participant outcomes? Investment Menu Construction discusses how findings from behavioral economists can help guide the construction of an investment lineup that will make participant decision-making easier.

Source: Arnerichmassena.com, November 2017

It Takes a Committee - The Best Ways to Govern DC Plans

Abstract: Effective governance of their DC plans helps employers meet fiduciary responsibilities, abide by regulatory requirements, and minimize the risk of litigation and negative press. This 13-page report identifies ways in which committee structure, composition -- and even the number of meetings and those responsible for meeting agendas -- have important implications for the priorities, challenges, and effectiveness of DC plan governance.

Source: Callan.com, October 2017

The Misperception of Fiduciary Risk and Active Management in DC Plans: A Legal Perspective

Abstract: In the complex and litigation-prone world DC plans occupy, it is important to underline what the real focal points for fiduciaries should be. Here are five guiding principles under ERISA that can aid fiduciaries in selecting and monitoring investment options and assessing active strategies within their plan lineups.

Source: Troweprice.com, September 2017

White Label Fund Options for DC Plans

Abstract: The core lineup of most plans has remained largely unchanged over the past 20 years. The author suggests that it's time for DC plan sponsors to rethink these legacy investment lineups. This paper focuses reframing the design of actively managed options with an emphasis on fewer, broader investment options to ease participant decision making.

Source: Willistowerswatson.com, September 2017

Eight Tips to Build and Run Yours Retirement Plan Committee Effectively

Abstract: There's no one size fits all formula for building the "perfect" committee. A lot depends on the size and design of your plan, and the demographics of your participant population. Here are eight tips to help you set up and structure a committee that benefits your plan and acts in your participants' best interests.

Source: 401ktv.com, September 2017

Fiduciary Education Is Key for Plan Sponsor Investment Committees

Abstract: As advisers and others serving plans will attest, greater awareness doesn't necessarily mean that committee members understand their legal responsibilities or precisely what they should be doing as a plan fiduciary.

Source: Investmentnews.com (registration may be required), September 2017

Who Are the Right People to Sit on Your Investment Committee?

Abstract: Who are the right people to sit on your investment committee? The answer certainly seems straightforward, if only because most corporate committees maintain a list of the usual suspects. But are these the best ways to build an investment committee?

Source: Vanguardinstitutionalblog.com, July 2017

Best Practices for Improving Retirement Plan Investment Committee Decisions

Abstract: As a plan sponsor, one of the many hats you probably wear is investment committee member. It's a role that's critical to the success of your retirement plan, but your specific responsibilities may not always be clearly defined or easy to figure out. This article offers some best practices.

Source: 401ktv.com, July 2017

"Apples to Apples" and Other Investment Return Issues

Abstract: Courts, plan sponsors, and investment fiduciaries in general must be able to differentiate between nominal returns, load-adjusted, and risk-adjusted returns in order to (1) know when each is appropriate, and (2) to be able to properly determine whether a fund is providing commensurate value for higher fees in order to ensure that they are properly comparing "apples to apples" in order to act in the "best interests" of a plan and its participants.

Source: Iainsight.wordpress.com, June 2017

How to Evaluate Your 401k Investment Advisor

Abstract: Assessing the performance of your 401k investment advisor is often difficult. How can you tell if your 401k investment advisor is doing a good job? A few tips are provided in the short piece.

Source: Lawtonrpc.com, June 2017

Five Best Practices for Investment Committees

Abstract: Maintaining an institutional investment program, including the oversight and responsibilities of acting as fiduciary, can be daunting to even the most seasoned investment committees. With so much involved in managing an investment portfolio, it's easy for committees to get lost in the details and lose sight of the big picture. The most successful investment committees support their organizations by using five best practices.

Source: Plantemoran.com, May 2017

Duty, Opportunity, Mastery: Investment Committee Best Practices

Abstract: The purpose of this 21-page paper is to provide investment committee members with practical guidance on meeting their fiduciary responsibility through proper debate and documentation, constructing their committee thoughtfully with well-vetted leaders and members with diverse skills and backgrounds, conducting well-structured and productive meetings, and anticipating and resisting counterproductive behaviors.

Source: Vanguard.com, May 2017

Preparing DC Menus for the Next Evolution

Abstract: Pressures call into question the adequacy of today's core menus and should spark a discussion regarding how menus can evolve to help participants build for retirement. That discussion should begin by examining where participants are putting their money.

Source: Pionline.com, May 2017

The Tiered Investment Menu: A Behavior-Based Approach to Menu Design

Abstract: The marketplace is trending towards a redesign of the investment menu. This is being done through investment menu segmentation into behavior-based levels or tiers. Many plan sponsors and financial educators are finding this new tiered menu approach easier to communicate and simpler for employees to understand how to select investment options that may be most suitable for them.

Source: Fiallc.com, May 2017

Duty, Opportunity, Mastery: Investment Committee Best Practices

Abstract: Investment committees carry weighty responsibilities. This 21-page paper offers insights into how committees can improve decision-making on behalf of their organizations.

Source: Vanguard.com, April 2017

Seven Best Practices Every Retirement Plan Committee Member Should Follow

Abstract: Many plan sponsors create oversight committees for their qualified retirement plans. The duties of these committees are significant and committee members are typically fiduciaries who need to act in a diligent, prudent manner, and in the best interest of the participant. This article covers seven of the most important best practices every plan committee should consider following.

Source: Meadenmoore.com, April 2017

401k Plan Trustees: How Do You Monitor and Select Investments?

Abstract: The resident plan fiduciaries (the company officers and key employees who act on behalf of the sponsor as plan administrator or trustee) have a legal duty to "select and monitor" plan investments and, in the case of sponsors who have hired investment professionals, to monitor not only investment performance but also the performance of the investment professionals. So, how do you "select and monitor"?

Source: Retirementplanblog.com, April 2017

The Misperception of Fiduciary Risk and Active Management in DC Plans: A Legal Perspective

Abstract: Plan sponsors face increasingly complex fiduciary requirements, as well as pressure to provide an optimal plan experience for participants at a reasonable cost. Making investment selection decisions under these conditions can prove challenging. This white paper aims to help fiduciaries navigate the waters of plan investment selection and monitoring processes.

Source: Troweprice.com, March 2017

401k Index Funds -- They Make it Easy to Reduce Fiduciary Liability

Abstract: Investment in equity index funds -- and other passively-managed investments designed to track a market index -- is exploding. If you are a 401k fiduciary, this trend is great news. While it can be difficult for 401k fiduciaries to insulate themselves from investment-related liability using actively-managed funds, this job can be dead simple using index funds.

Source: Employeefiduciary.com, February 2017

Structuring a Plan Committee: Who Should Participate?

Abstract: There are no specific legal requirements regarding the number of members or who should or should not sit on a retirement plan committee. However, there are common practices plan sponsors might keep in mind that can serve as guidelines for establishing this body.

Source: Plansponsor.com, February 2017

Six Questions to Ask at Your Next Investment Committee Meeting

Abstract: Every plan, and every investment committee, is unique, and yet, conducted properly, there are inevitably areas of commonality. Here are some questions that could enhance the discussion, if not the outcome, at your next investment committee meeting.

Source: Asppa.org, January 2017


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