By Mark Olsen, Managing Director at PlanPILOT
Due to the significant amount of fiduciary responsibility of a retirement plan committee to both consider the best interests of the participants and properly oversee the administration of the plan, committee meetings ought to be as efficient and effective as possible. Like any other executive meeting, proper preparation and processes can deliver meaningful benefits to both the participants and the committee members themselves.
In our experience at PlanPILOT, effective preparation for plan committee meetings is a multifaceted endeavor, but doing so in a careful and structured manner should enable the committee to cover the many areas of plan administration, functionality, regulation changes, and investment evaluation. Here is a sampling of what we recommend.
Prepare a Structured Agenda
Like any other effective meeting, having a structured agenda at the ready is essential. Prepare the agenda well ahead of time and circulate drafts to committee members to solicit their input, potential sticking points, and innovative ideas. Steer and emphasize discussion topics toward critical areas of plan management to ensure due diligence requirements are fulfilled.
Investment analysis, selection, and monitoring are only a few aspects of the committee’s responsibilities. Include a comprehensive review and regulatory update of the committee’s fiduciary duties, such as overseeing plan administration and managing fees. Include elements of fiduciary training for committee members, which is a growing focus of the DOL and plan auditors. Include a rough timetable to get through the agenda while allowing adequate time for discussion and Q&A as needed. Once the meeting starts, stick to the agenda and rough timetable to avoid getting sidetracked and so the meeting ends as scheduled.
Assign Pre-Meeting Homework to Committee Members
Few things derail a meeting’s effectiveness more than unprepared committee members. Everyone should arrive at the meeting with a clear understanding of the agenda, the objectives of the discussions, and have their questions or concerns ready. Along with sending the prepared agenda to members in advance (that includes prior feedback), make sure to include—or provide access to—key documents that will be referenced or reviewed, and encourage members to review these beforehand. These documents can include investment performance reports, Investment Policy Statements (IPS), and other plan governing documents. If regulatory changes are to be considered, include summations of the changes and the implications for the plan going forward. Allow time for the members to ask and get answers to quick clarification questions ahead of time so the discussion isn’t interrupted or delayed unnecessarily.
Plan Meeting Topics Out a Whole Year Ahead
Each meeting should include the following agenda items:
- Review of the previous meeting’s minutes and acceptance by the committee
- Fiduciary training
- Investment due diligence
- Review of fund utilization
From there, if time remains, schedule other topics over the year that should cover all aspects of the plan which the committee should monitor:
- Changes in industry regulations and the marketplace
- Updates on legislative and regulatory changes affecting the business and therefore the plan
- Insights from recent litigation and key takeaways
- Innovations in products or technology and emerging industry trends that may enhance or detract from future company profitability and growth
- Plan Investment Evaluation
- Overview of financial market and economic conditions
- Assessment of current investments against IPS standards; does the investment strategy and offerings meet these standards or is revision necessary?
- Analysis of participant allocations across investments options; are some outdated or are new options available, requested, and viable?
- Review of investment-related expenses; do these continue to meet industry standards and would satisfy DOL or auditor review? How do these compare with competitor or peer plans?
- Regular discussion with the plan investment advisors as to whether changes in strategy, fund investments, and recordkeeper platform is warranted or needed
- Review of Plan Administration
- Summary of plan activities including loans, contributions, and distributions. Are there symptoms that indicate problematic trends requiring plan amendments?
- Examination of operational issues and testing outcomes
- Addressing participant complaints and concerns
- Evaluating participant education and effectiveness of these programs regarding participant understanding of plan benefits and options
- Upcoming deadlines and reporting obligations for the plan. Are these imminent and being met in a timely fashion?
- Potential for deficiencies as a result of annual audits and regulatory examinations
As mentioned, the complexity of plans and the inherent responsibility of retirement plan committees requires careful and diligent attention to a myriad of details. Only with careful and thorough meeting preparation can these committees efficiently carry out periodic meetings and successfully fulfill their duties and objectives.
Utilizing Professional Assistance
At PlanPILOT, our company is uniquely positioned to help you with these objectives. If you’re ready to upgrade to a new standard for your benefit planning, reach out to us at (312) 973-4913 or send an email to mark.olsen@PlanPILOT.com to learn more about how we can customize our services and your plan to fit your unique needs.
About Mark
Mark Olsen is the managing director at PlanPILOT, an independent retirement plan consulting firm headquartered in Chicago. PlanPILOT delivers comprehensive retirement plan advisory services to 401(k), 403(b), and 457 plan sponsors. His specialties include plan governance, investment searches, investment monitoring, and plan oversight. Mark is recognized as a leader in the industry and speaks at national conferences, including those organized by Pensions & Investments, and CUPA-HR.