Are you a plan sponsor?

In 2015, the Supreme Court unanimously ruled that ERISA fiduciaries have a continuing duty to monitor plan investments. While this outcome had little in the element of surprise, it presents an opportunity for plan sponsors to review their benefits provider governance structure.

Plan sponsors should be asking these 11 questions.

  1. Does the investment policy articulate a monitoring process that combines a formal structure with flexibility to take into account prevailing conditions?
  2. Is the investment monitoring process practical? Does it include best practices? Will it lead to reasonable outcomes?
  3. Does the investment policy identify clear monitoring standards for the investment options?
  4. Are the monitoring standards incorporated in the monitoring reports?
  5. Does the monitoring process include benchmarking investment fees and expenses?
  6. Does the investment policy statement articulate a clear objective for each of the asset classes and/or investment options included in the retirement plan?
  7. Is there an alignment between asset class objectives in the investment policy and the investment options included in the retirement plan?
  8. Does the investment committee operate in an environment where committee members are encouraged to ask questions?
  9. Do committee members understand what the investment consultant is providing?
  10. If there is an outsourced chief investment officer, is this relationship subject to monitoring?
  11. Does the monitoring process include written reports, documenting the research, decisions and actions taken in line with the investment policy?

We started our business by asking one question “What is right for our clients?” This question remains central to our business. If you want to know if you’re meeting your plan sponsor fiduciary duty, please contact us to discuss.

Phil Edwards, Principal, Curcio Webb