Getting There: 8 Essential Elements for Plan Success

Process is everything. Both the DOL and ERISA expect you to meet very specific elements to ensure your plan has the opportunity to succeed.  Here are 8 essential elements for plan success.

1. Document goals & objectives

Set definitive goals and objectives so you can monitor how well your plan meets them.

2. Develop an Investment Policy Statement (IPS)

Based on your stated goals and objectives, document meaningful direction and guidance for trustees and investment professionals regarding the selection and management of assets.

3. Continued Monitoring of Plan Assets (ERISA required)

Develop a comprehensive plan to review all of the funds and assets in your plan. You must ensure that all assets continue to meet your initial selection criteria.

4. Document Fiduciary Standards of Care

As plan fiduciary you must act solely in the interest your employees and their beneficiaries. This responsibility requires you to follow a set of fiduciary standards AND document that you are, in fact, following them.

5. Select & Monitor Service Providers

DOL mandates that as Plan Sponsor, you must conduct thorough due diligence and a rigorous analysis of the plan providers and its third-party partners.

6. Understand Plan Expenses

Establish procedures for controlling and accounting for all expenses your employees incur from the plan.

7. Understand Participant Communication Guidelines

The DOL, ERISA and Financial Industry Regulatory Agency (FINRA) have all set standards for how you are to inform and educate your employees regarding your retirement plan. You must know and follow them accordingly.

8. Stay Current with Changes That Affect Your Plan

Change is constant, but ignorance is no excuse. You must comply with all current and emerging requirements that affect your plan.