If you are an employer or employee who has decision-making authority over your company’s retirement plan, there is a strong chance that you are a 401(k) plan fiduciary. You have a legal obligation to operate the plan solely in the interests of the plan participants (people with retirement account balances) and their beneficiaries (people who may inherit those retirement account balances). Additionally, two other primary responsibilities are to manage the plan for the exclusive purpose of providing benefits and paying reasonable plan expenses.
Many HR representatives, Controllers, CEOs, CFOs, and Presidents are unfamiliar with the significant amount of liability to which they are exposed with their duties regarding their company’s 401(k) plan. Establishing a retirement plan committee might be a resourceful cornerstone for the oversight of your company’s retirement plan.
Questions to begin
When considering if a retirement plan committee could be beneficial for your organization, start by asking a few questions:
If one person, do they have the care, skill, and expertise to make well-informed, documented decisions?
Plan fiduciaries have a continual and ongoing responsibility to monitor the plan. Therefore, if there was any hesitation over these questions, maybe it’s time to speak with a professional to learn more.
Setting up a committee
If you believe a committee might be a good way to establish plan accountability, reduce liability exposure, and share the task work responsibility of plan management, here are some next steps to consider.
Helping govern your company’s retirement plan is a big responsibility: you have the power to directly impact future retirement outcomes. It is important to take this role seriously. By establishing a committee, it might be another way that your company can strive to increase the preparedness of your workforce and place them on the path to a secure retirement!