Benefit plan documents should be reviewed regularly with the plan’s third-party administrator. While a plan’s TPA can assist employers in meeting regulatory requirements, it is important to define the roles and responsibilities of the plan sponsor, who is ultimately responsible for implementing plan policies and procedures.
Here are four common issues that plan sponsors face and ways to successfully navigate them:
Plan investment options
One of the key components to making sure a company’s employee benefit plans are being administered properly, is to ensure that the plan options are appropriate and in accordance with the plan’s investment policy statement. An oversight committee should be designated to regularly review investment options offered to plan participants. This includes a regular screening of the options available to determine that investment earnings, as well as administrative and investment fees, are reasonable and in accordance with expectations. Even commonly used target retirement date funds can be considered inappropriate for participants if their fee structure is considered excessive. A plan sponsor can rely upon the service provider to provide advice in selecting a diverse group of investment options; however, the plan sponsor is ultimately responsible for selecting appropriate investments and monitoring the plan’s investment performance.
Stephanie specializes in providing employee benefit plan services for numerous clients in the not-for-profit, manufacturing, wholesale and construction industries. She is a manager in Ellin & Tucker’s audit, accounting and consulting department, and has been with the firm for 10 years.