There is more to fiduciary responsibility than changing plan investments. Most plan sponsors should consider outsourcing most of these duties to independent professionals. This will reduce their fiduciary risk and improve the quality of the plan they offer their employees.

Monitoring and making investment line-up revisions is only a part of the equation. A plan can offer 5-star funds with low expense ratios across all major asset classes, but if participants make poor choices, the plan falls short.They say the definition of insanity is doing the same things over and over and expecting different results.  How would you describe continually monitoring the funds available in a plan without analyzing how effectively they’re being used?

Plan fiduciaries are required to make decisions in the sole best interest of their participants, so sponsors should make tools and services available to help participants make appropriate savings and investment decisions – and monitor the results.

As you gear up for your annual meetings this year, I challenge you to look beyond the investments to how your participants are doing.

Study after study shows that, as a whole, participants are poor investors. If this is an issue with your plan, take action. Whether through changes in plan design, such as defaulting participants into a QDIA, or by offering products and services geared toward improving participant behaviors, take action.

And regardless of the solution you choose, measure results. Putting a solution in place and walking away is not the answer.

If we, as an industry, begin to monitor participant behavior and results with the same level of detail and scrutiny that we monitor investments, participants are going to be much more prepared for retirement.

Having the best funds in your plan is only part of the solution. Would you give a novice all the best tools and not tell them how to properly use them? A retirement portfolio or plan should be treated the same.

Please comment or call to discuss how to improve your company retirement plan.