Fiduciary Best Practices
Retirement Services & Financial Advisors - Serving Columbus & Beyond
At Life, Inc. Retirement Services we understand your company, or your book of business may not be centered around retirement plans, so we understand you rely on the expertise of those in the industry for information the same way your clients rely on you for expertise. We want to be your trusted retirement plan resource and have included some of our Fiduciary Best Practices below to help your clients meet these responsibilities.
Document, Document and Document Again! Your plan fiduciaries are legally responsible for the operation and assets of the plan. The best defense is to document the decisions and practices you have in place in case someone claims a fiduciary breach against your clients. While in a courtroom or during arbitration are not the times you want to use the "dog ate my homework" defense. At a minimum, make sure you have named fiduciaries and their responsibilities in writing, along with an Investment Policy Statement (IPS) to show how your assets are being managed.
Form a Committee and Set a Meeting! As a part of developing your plan's IPS, have your plans formed an Investment Committee to develop the policies you are going to use to monitor the plan investments and document these meetings. Set these meetings up on a quarterly basis and monitor funds according to the criteria you use in your IPS.
Monitor Fees on a Regular Basis! Make sure to compare providers' fees no less than every three years to ensure fiduciary responsibility and reasonable fees. This can also be a great tool in helping future clients by reviewing their costs and setting a process in place to continually monitor fees.
Fidelity Bond Protects the Plan, But Not You! A Fidelity Bond is required by the DOL for all plans that have more than one participant in them. Consider additional protection for your fiduciaries by getting fiduciary insurance as well, as neither your Fidelity Bond or your protection as an LLC or Corporation protect you from your responsibilities as a fiduciary in the event of a lawsuit or payments of restitution.
Don't Worry, the DOL is Here to Help! While it may not be the most common thought, make sure to take advantage of existing protections the DOL has extended fiduciaries by being 404(c) compliant, or if using a default fund, make sure it is Qualified Default Investment Alternative (QDIA). Both have additional disclosure requirements, but when coupled with already required 404(a)5 fee disclosures, the additional cost and time may be well worth the extended protections you receive.
Avoid Prohibited Transactions at All Cost! These could open you up to legal liability, or even if self-corrected through the DOL the cost for self-correction could be 50% of the amount involved. The most common transaction is the intentional delay of remitting contributions and loan repayments to fund other parts of your business, but there could also be other unintentional transactions.
While there are many more practices and processes that make up a successful retirement plan, these are some of the Fiduciary Best Practices to help your plans succeed when it comes to their fiduciary responsibilities. We're not like other TPAs that only focus on your plan's administration since a successful retirement plan is made up of more than just successful administration. We want to be the source for your firm when it comes to the retirement plans you serve, and commit to it by promising Superb Service, Proficient Results, Tailored Solutions, and Utilizing Technology for your plans. Since we are also a Registered Investment Advisory firm, these are the practices we put in place for the clients we serve, and commit to protecting your book of business by signing not only a Do Not Compete contract for the plans you bring us, but for all plans under your firm's book of business. For more information on fiduciary responsibility and best practices, please contact us today.