Should We Have a Retirement Plan Committee?


May 23, 2018

If you are an employer or employee that has decision-making authority over your company's retirement plan, there is a strong chance that you are a 401(k) plan fiduciary. You have a legal obligation to operate the plan solely in the interests of the plan participants (people with retirement account balances) and their beneficiaries (people who may inherit those retirement account balances). Additionally, two other primary responsibilities are to manage the plan for the exclusive purpose of providing benefits and paying reasonable plan expenses.1

Questions to begin

When considering if a retirement plan committee could be beneficial for your organization, start by asking a few questions:

  • When was the last time your company's plan was formally discussed?
  • Who makes the company's retirement plan decisions?
  • Is it one person?
    • If one person, do they have the care, skill, and expertise to make well-informed documented decisions?
  • Is it a group of people?
    • Is it a formal or informal group?
  • Does the group meet regularly? If so, is there a designated person who takes meeting minutes? If not, how would the committee defend their decisions in a court of law to prove they were acting in the best interests of the participants?

Plan fiduciaries have a continual and ongoing responsibility to monitor the plan.2 Therefore, if there was any hesitation over these questions, maybe it's time to speak with a professional to learn more.

Setting up a committee

If you believe a committee might be a good way to establish plan accountability, reduce liability exposure, and share the task work responsibility of plan management, here are some next steps to consider.

  • Create a written charter that clearly defines the roles of committee members.
  • Establish an investment policy statement (IPS). While an IPS is not required, it is highly encouraged.
  • Form criteria for the selection of committee members. It is best not to include names within the charter; however, it is common to include job titles of personnel expected to be involved with plan decisions (e.g. CEO, CFO, and President).
  • Keep and Maintain documentation of all meetings. Store information in a central location for accessibility. If there is a change of committee members, these files should be easily located. A friendly reminder: plan data should be kept on file for 7 years.3
  • Meet regularly and discuss plan information such as investments, expenses, services, and purpose.

Helping govern your company's retirement plan is a big responsibility: you have the power to directly impact future retirement outcomes. It is important to take this role seriously. By establishing a committee, it might be another way that your company can strive to increase the preparedness of your workfoce and place them on a path to a secure retirement.

Want more guidance? Contact our office for additional information and to discuss your retirement plan committee questions at (309) 671-4200.



1"Health Plans & Benefits: Fiduciary Responsibly." United States Deparment of Labor. 7 Feb. 2018

2"Tibble et al v. Edison International." Supreme Court of the United States. 18 May 2015.

3"29 U.S. Code § 1027 - Retention of records." U.S. Code.

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements and you should consult your attorney or tax advisor for guidance on your specific situation.

About ABG RPS

ABG Retirement Plan Services (ABG) is a regional service office of one of the largest retirement plan administration organizations in the country. (More)

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