How do plan sponsors operate and administer employee benefit plans in a manner that is both effective and compliant with applicable regulatory and fiduciary obligations? This work, broadly referred to as plan governance, can be challenging.
There are easily more than 100 required activities for each type of employee benefit plan, and, while many of these can be outsourced, the plan fiduciary still has ultimate responsibility for oversight. Meanwhile, regulatory scrutiny of plan governance has never been stricter, with the IRS, Department of Labor (DOL) and other parties issuing new guidance each year on issues ranging from investment fees to data security. Given the current environment, how can plan sponsors make sure they are not just “checking the boxes,” but are applying best practices in plan governance?
Committee Structure and Responsibilities
Every benefit plan that is subject to the Employee Retirement Income Security Act (ERISA) must designate a “named fiduciary” who is responsible for managing and administering the plan in accordance with ERISA’s fiduciary standards. In practice, most employers designate one or more committees of employees to serve as fiduciaries on the organization’s behalf.