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  • Plan Sponsor Fiduciary Responsibility Checklist 0 comments
    Jan 18, 2011 1:28 PM

    Many of the actions involved in operating a company’s retirement plan make the person performing them a fiduciary. A fiduciary is subject to standards of conduct because they act on behalf of participants and their beneficiaries in the retirement plan. According to the Department of Labor, plan fiduciaries are bound to:

    • Act solely in the interest of plan participants and their beneficiaries and with the exclusive purpose of providing benefits to them,
    • Carry out their duties prudently,
    • Follow the plan documents (unless inconsistent with ERISA regulations),
    • Diversify plan investments and
    • Pay only reasonable plan expenses.
    The following are areas for retirement plan fiduciaries to consider when evaluating their current practices. Reviewing this checklist may highlight certain areas where further steps should be taken to manage the liability associated with the administration of your plan. If you have concerns or would like to discuss your current situation, please contact the Smart401k Employer Services team at 877.627.8401.

    Roles & Responsibilities 
    ___ Have you identified and named your plan fiduciaries based on the functions they perform for the plan?
    ___ Have you established a Retirement Plan Committee?
    ___ Do you have a separate Investment Committee from the Retirement Plan Committee? Or does the Retirement Plan Committee serve in both roles?
    ___ Have you defined and documented what level of authority certain individuals are given in the administration of the plan over routine matters?
    ___ Has the plan’s trustee been identified and documented?

    Plan Operation / Administration
    ___ Has your plan document been updated for all required legislative procedures such as EGTRRA?
    ___ Are you conducting at least annual meetings with the retirement plan committee with detailed
    minutes, including any decisions made by the committee?
    ___ Do you periodically review all plan service providers and their contracts and document reviews as well as any decisions made?
    ___ Do you periodically review and document the review of plan and participant fees to assure reasonableness and proper application?
    ___ Are you making timely contributions of employee deferrals into the plan?
    ___ Is your plan being administered according to the terms of the plan document?
    ___ Are you avoiding Prohibited Transactions?
    ___ Do you intend for your plan to be 404(c) Compliant? If so, are you meeting the appropriate requirements?
    ___ Do you have appropriate Fiduciary Insurance coverage (fidelity bond) for your plan?

    Plan Investments
    ___ Have you acted as a “prudent man” would act when carrying out your investment responsibilities?
    ___ Do you have a written Investment Policy Statement (NYSEARCA:IPS), and are you following it?
    ___ Does your IPS require a periodic investment review with specific review criteria and are you conducting and taking action on those reviews (with professional help)?
    ___ Are you providing an investment menu with a diversified selection of risk/return characteristics?
    ___ Have you made sure not to select investments that might create possible conflicts of interest?
    ___ Has sufficient due diligence been used in the ongoing selection and monitoring of investment options in your plan?
    ___ Do your investment option selections continue to represent the asset classes for which they were chosen?
    ___ Does your plan offer investment options to cater to less sophisticated or more sophisticated participants?
    ___ Have you supplied participants with the investment information and education needed for them to make informed investment decisions?

    Annual Requirements
    ___ Are you meeting all appropriate tax filing deadlines such as 5500 filing for the plan and 1099R filing for participant distributions?
    ___ Are you meeting all of the plan’s Annual Testing Requirements?
    ___ Does your plan have an annual audit performed, if required?
    ___ Do you communicate information to participants about plan investments and features such as the Summary Plan Description (SPD), Summary of Material Modifications (NYSE:SMM) and Summary Annual Report (NYSE:SAR)?
    ___ Are benefit statements being distributed?

    Scott Swezy
    Vice Persident, Smart401k

    About Smart401k
    Smart401k is a Web-based investment adviser providing unbiased advice to help employees invest in their employer-sponsored retirement plans.  Smart401k provides service to almost 11,000 clients who collectively have more than $1.5 billion in assets. Individuals receive personalized investment recommendations based on the funds in their plan and support of professional investment advisers available to answer all investment questions. Based in Overland Park, KS, Smart401k can be found at
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