Best practices recommend that 401k plan sponsors conduct a periodic, independent, due diligence review of their fiduciary and operational procedures of their 401k plan to determine and document its current state. The due diligence review is a great way to identify areas within the plan that need further attention and support, or to confirm effective management for the plan’s fiduciary file.
Complete all questions to see your score below.
Do you have a 401k plan committee charter and has it been updated in the past 3 years?
Do you have regular pension and investment committee meetings and are proper minutes being drafted and documented from each meeting?
Are all your annual participant disclosure notices—404(a)(5) fee disclosure, Qualified Default Investment Alternative (QDIA) notice, Summary Plan Description (SPD), Safe Harbor and auto-enrollment notices, if applicable—properly getting distributed to employees each year?
Are you conducting fiduciary education for the 401k committee every 2 years to keep members updated on changing regulations and requirements?
Is the selection and monitoring process for your plan investments being conducted by a prudent specialist and getting properly benchmarked?
Do you have target date funds within the plan and have they been analyzed in conjunction with the Department of Labor (DOL) tips and guidelines for reviewing target date funds?
Do you have an Investment Policy Statement (IPS) and has it been updated within the past 2 years?
Are you following best practices for your capital preservation fund and utilizing an effective stable value fund vs. money market fund?
Have your plan costs been reviewed and benchmarked within the past 3 years?
Are you confident you are using the lowest available fund expense ratios across your plan’s investment lineup?
Do you have an Education Policy Statement (EPS) and an effective communication strategy in place for communicating with employees regarding how to best utilize the 401k plan?
Do employees have an investment professional/fiduciary available to help provide education, guidance and advice geared towards helping employees achieve their retirement goals?