Fiduciary Checklist

Following this checkist of retirement plan guidelines can help manage your fiduciary responsibility as a plan sponsor.  We suggest reviewing this checklist annually to determine how well your plan adheres to each guideline.

Document your investment policy statement

• Create and maintain a written document, monitor it and follow it.
  
• Select prudent investments.
  
• Periodically review your investment policy statement and investment options.

Select investment options

• Select a group of prudent investments that helps the plan meet 404(c) requirements.
  
• Offer at least three “core” investments with materially different risk and return characteristics.
  
• Allow participants to build portfolios from the investment menu with risk and return characteristics suited to individual situations.
  
• Permit participants to transfer among core investments at least every three months.
  
• Explain plan provisions and investment options to participants.

Notify participants that yours is a 404(c) plan and provide disclosures

• Explain that your plan voluntarily complies with 404(c) and that plan fiduciaries may be relieved of liability for investment losses.
  
• Explain procedures and limitations for giving investment instructions.
  
• Identify the fiduciary responsible for providing 404(c) disclosure information.
  
• Explain employees’ voting rights and restrictions.
  
• Disclose transaction fees and expenses, including commissions and sales loads.
  
• Describe information that is available on request.

Explain investment options to plan participants

• Describe investment options, including objectives and risk and return characteristics.
  
• Provide printed or online copies of fund prospectuses either immediately before or after initial investment.

Educate employees about retirement planning

• Explain the benefits of participating.
  
• Provide general financial planning and investment information.
  
• Use asset-allocation models for participants with varying risk tolerances and time horizons.
  
• Use interactive materials (worksheets, questionnaires, software, etc.) to help participants estimate retirement income needs and assess the effect of various asset allocations on those needs.
  
• Maintain records of all education efforts.

Consider adding a corporate trustee to your retirement plan for overall plan assistance and additional fiduciary protection.