The Responsibility of Being a Plan Sponsor
Plan Sponsors find themselves under greater scrutiny and regulatory pressure than ever before to be prudent fiduciaries over their retirement plans. Just a few of the requirements that new legislation has imposed upon plan sponsors who offer retirement plans include:
- Greater disclosure of all administrative fees,
- Development of investment policy statements,
- Transparency of compensation to all service parties,
- Timeliness of contribution remittance, and
- Quarterly investment committee meetings.
As greater regulatory pressure is imposed upon plan sponsors, questions about fiduciary liability have begun to surface and dominate conversations when considering implementation of a retirement plan or replacing existing plans. Trustees are not alone in carrying the liability. Instead, there are numerous people inside of the organization who may be unwittingly serving in a fiduciary role.
Fiduciary Considerations
Here are some questions to consider, which may partly assist you in determining whether you are satisfying your requirements to be a prudent plan sponsor:
- Who educates plan participants to meet 404(c) compliance?
- Who does the fiduciary competency education?
- Who satisfies the trustee functions?
- How often are plan documents updated?
- What happens if there is a testing compliance issue?
- Are you aware of the Safe Harbor rules implementation?
- Do you purchase fiduciary liability coverage?
- Have you established an investment policy statement and investment policy committee?
- Are you regularly monitoring investment options and comparing performance to peer groups?
- How often do you eliminate underperforming investment options?
If you find that you are not meeting these basic few requirements with your existing plan or are considering starting a new plan for your organization and this process seems too confusing and exhausting, you may want to consider adopting the Sequent Retirement Savings Plan.
Sequent Can Assist with Your Organization's Retirement Plan
Sequent has partnered with John Hancock Retirement Plan Services, one of the premier retirement plan providers, in assembling a dynamic service team that includes dedicated Sequent plan administrators, Fiduciary Guidance & ERISA Counsel, independent auditors, Financial Educators and an Investment Committee that meets quarterly to monitor performance of the investment options and maintain the plan.
If you are interested in meeting with a Sequent Financial Educator to help you determine if the Sequent Retirement Savings Plan is the right solution for your organization, please contact your Sequent Personal Service Team at 1-877-447-4111.
About the Author, Phil Scott, Investment Advisor Representative of Sequent Retirement & Benefits Group
Phil Scott is an Investment Adviser Representative with the National Association of Securities Dealers and a licensed Life & Health Insurance Representative, with 20 years of financial services experience.
In his role, Phil oversees and supports the Financial Educators at Sequent and supports related securities activities throughout Sequent's Columbus, Birmingham and Nashville markets. His areas of focus include investment strategy services, defined contribution planning, executive and voluntary benefits.
He is also a Registered Investment Adviser Representative with National Planning Corporation (NPC), Member FINRA/SIPC. Sequent Retirement & Benefits Group and NPC are separate and unrelated companies.