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A Fiduciary Calendar

Plan sponsors have important obligations as ERISA fiduciaries to a retirement plan. First of all they must follow ERISA’s high standards of conduct as they administer the plan and safeguard participants’ assets. The key to managing ERISA fiduciary responsibilities is developing and following prudent plan governance practices. Adopting policies and procedures to make certain they are handling plan assets properly and making prudent decisions will help plan sponsors demonstrate that they have met their fiduciary responsibilities.

This is the fourth in a series of posts about plan governance best practices for plan sponsor fiduciaries. Read the first post in the series.

Five Fiduciary Responsibilities

  1. Act solely in the best interests of the plan participants
  2. Carry out duties prudently
  3. Diversify investments
  4. Follow the terms of the plan document
  5. Pay only reasonable plan expenses

Use a Calendar to Stay on Track

So, to help ensure that fiduciary plan governance practices are comprehensive and consistent from year to year, many plan sponsors use a fiduciary calendar. Therefore, by assigning certain tasks to specific times of the year in a plan, plan sponsors can make certain they are addressing all critical items each year.

Financial advisors are a great resource for helping plan sponsors understand their fiduciary responsibilities and develop a plan governance strategy. Many plan sponsors find it beneficial to divide fiduciary tasks into items to address every quarter and items they should complete just once per year, and then assigning the tasks to a specific quarter. Even more, plan sponsors should work with their financial advisors to craft a fiduciary calendar to follow consistently year to year. The calendar should take into account the timing of reports and testing results received from service providers, open enrollment periods, and critical deadlines (e.g., contributions, disclosures).

After they review and discuss each calendar item, plan sponsors should document their decisions and identify any further actions or deadlines. For example, plan amendments, participant notices, discussions with service providers.

Furthermore, the following fiduciary task list identifies some of the actions plan sponsors may want to include in their fiduciary calendars, broken down by quarterly or annual tasks.


Fiduciary Tasks

Monitor legislative and regulatory developments affecting retirement plans

Tap into the expertise of service providers and financial advisors. Understand how new retirement plan rules will affect plan operations. Or, to determine whether a document amendment is required.

Review plan investment performance

Compare to criteria in Investment Policy Statement (IPS), if applicable, and evaluate if investments should be on a watch list for possible removal from the plan.

Evaluate service provider performance

Confirm service providers are meeting all service standards. Then, identify any plan operations issues and develop procedures to avoid similar issues in the future.

Review communications from service providers and respond promptly

Accurate and timely participant disclosures, compliance testing, and government reporting depend on good data and timely communications between service providers and plan sponsors.

Address participant concerns

In addition to resolving any concerns, determine whether the problem could apply to other participants and whether additional procedures should be adopted to prevent future problems.

Identify upcoming deadlines and any tasks that must be completed to ensure compliance

As plan fiduciaries, plan sponsors must ensure the plan meets all compliance deadlines – even if a service provider generally assumes responsibility for the event (e.g., delivering quarterly participant statements).



Fiduciary Tasks

Consider the plan objectives and plan design features

Evaluate whether there have been any significant changes in the business or employee demographics that warrant changes in the objectives for the plan or plan design features.

Evaluate plan performance

Compare plan performance to the objectives set for the plan (e.g., participation rate, contribution rate, average plan balance, allocation across investments, rate of distributions and loans, including loan defaults) and benchmark performance against other plans of a similar size.

Review Investment Policy Statement (IPS)

Determine whether the IPS still aligns with the plan’s investment objectives and the investment products available to the plan.

Review the plan’s investment alternatives

Determine whether all investments continue to be appropriate for the plan and whether you should add additional investments. Benchmark fees to make certain they are reasonable.

Assess and benchmark administrative service provider fees

Make sure any fees paid from plan assets are reasonable (and for services necessary for the administration of the plan). Do this by benchmarking them against fees charged by other providers for comparable services.

Study the plan document

Check various plan transactions (e.g., definition of compensation used for contributions, hardship distributions) to make sure the plan is operating according to the terms of the plan document. Confirm any necessary amendments to keep the plan document up to date.

Ensure participant notices and government reporting were delivered

Make sure all required notices and disclosures were delivered timely to participants (and beneficiaries). Confirm the annual Form 5500 filing was accurate and on time. Discuss any issues with the appropriate service providers.

Review nondiscrimination testing results and contribution limits

Likewise, ensure you correct any excesses in a timely manner. Consequently, determine whether plan design changes are necessary to address multiple years of testing failures.

Confirm timely deposits of all employee contributions and loan repayments

Also, if any late deposits occur, work with service providers to make corrective contributions and determine what actions are needed to prevent late contributions in the future.

Assess fidelity bond

Determine whether fidelity bonds are adequate for each plan official who handles plan assets. Individuals are required to be bonded for at least 10% of plan assets ($1,000 minimum bond, $500,000 maximum bond, $1 million if plan holds company stock).


Start Here

Even more, talk to your financial advisor about developing a plan governance strategy to address all aspects of your fiduciary responsibilities including building a calendar of fiduciary tasks. Finally, you can find out more about your fiduciary responsibilities with this free publication from the Department of Labor: