Thankfully, there are tangible actions you can take to manage a retirement plan well and reduce or hopefully eliminate liability issues. Here are five things a plan sponsor or individual fiduciary can do:
- Create an Investment Policy Statement that describes your investment guidelines for selecting and monitoring funds. Keep the statement current and make it available for all plan participants.
- Administer the plan according to the plan document, making timely contributions and monitoring performance. Make adjustments as needed.
- Make it a priority to understand all contracts and fees. Negotiate fees to get the best rates possible. Fees are your greatest source of liability. Understand and account for all expenses.
- Engage others in the plan process by forming a committee to meet with regularly and document the meeting decisions and discussions.
- Seek advice from retirement plan specialists. Such specialists provide an un-biased third party view and can assist you with the need to be a prudent expert for your plan.
In addition, your plan auditor is a good source of information regarding the management of your specific plan. A good auditor adds value to the audit process that helps you be proactive about addressing potential issues.