Just like your annual physical to protect your health your company retirement needs an annual checkup. Regulations are in a constant state of flux, plus there are advancements within the industry. Remember the 401k is becoming the sole source of retirement for most Americans and should be offered as such.

Regular Plan MaintenanceIn addition to conducting an annual plan review, plan sponsors should perform regular maintenance to ensure seamless plan operations. This includes staying current on regulations, watching out for common mistakes and reporting to the federal government as required. Plan sponsors are responsible for establishing a program of internal controls, including monitoring and oversight controls surrounding the retirement plan.

A retirement plan committee can help the monitoring and oversight function. However, the committee won’t be effective unless it conducts regular meetings. These oversight meetings should not only review investment results but also check that internal controls related to plan administration are effective and operating appropriately to assist in identifying and detecting operational failures. The retirement plan committee should be well versed in all aspects of the plan, including review of investment performance, keeping current on law changes and monitoring of third-party administrators.

Employers where hiring an ERISA 3(38) Investment Manager does not work, the establishment of a retirement plan committee is recommended. Be certain that this committee meet regularly and documents all meetings. This is necessary in the event of an IRS audit.

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