TOP 5

Important actions for plan fiduciaries to take now

Following a structured and documented process to help ensure important fiduciary responsibilities aren’t overlooked has always been important, but even more so when challenged with unexpected priorities. Following are five suggested actions:

1 Maintain your governance calendar
Your work day is likely a bit different these days, with remote meetings and new priorities. Some tasks may have to be temporarily pushed aside. But when it comes to maintaining a fiduciary governance calendar, it is important to adhere to those regularly scheduled meetings. In fact, it may even be appropriate to increase the frequency of these meetings to address and monitor activities associated with your defined contribution plan.
2 Review your Investment Policy Statement (IPS)
The selection, monitoring and maintenance of an investment menu are the duties most frequently identified with being a fiduciary. The investment policy statement provides the framework for this process, and should be reviewed and amended to reflect changes in the securities markets, plan objectives or other factors relevant to the plan. Special attention is appropriate for employer securities and qualified default investment alternatives.
3 Educate and update participants with clear, consistent communications
Communications to your employees are important. It is always a good policy to identify communication activities that are intended to be “educational” in nature, as opposed to “investment advice” under the Department of Labor’s fiduciary guidance. The maintenance of clear documentation on this point is viewed by many as a fiduciary best practice. Be consistent with your communications and be sure that plan information is readily available.
4 Review your fiduciary liability insurance
The best legal defense is an appropriate and consistent fiduciary process. While most documents will provide for the indemnification of fiduciaries by the plan sponsor, many plan sponsors maintain fiduciary liability insurance as an additional layer of protection. This is typically a separate policy distinct from any directors and officers or errors and omissions policies.
5 Document, document, document
The most effective way of proving a prudent fiduciary process is to document your governing process, including meeting minutes and other records that capture how that process is followed.

Download our Fiduciary Fundamentals brochure for more information.