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ERISA Tips: Plan Monitoring

By John Iekel • April 03, 2018 • 0 Comments
Editor’s Note: ERISA Tips is a feature provided with you in mind — to make the newsletter more useful to you! If you have any content for ERISA Tips or the 403(b) Advisor that you would like to contribute or suggest, please contact John Iekel, editor of the 403(b) Advisor, at jiekel@usaretirement.org.

In “Retirement Plan Best Practices: Plan Monitoring,” Ryan Cunningham, Jillian Perkins and Terri Schwartz, writing for the investment services firm Arnerich Massena, discuss the importance of plan monitoring and offer tips and ideas on designing a process and procedures for monitoring the way a plan and its funds are managed.

The authors write that “ERISA enjoins plan sponsors with a ‘continuing duty to monitor’ plan investments, making it clear that building the plan and selecting the investments is not the end of a sponsor’s fiduciary duty.” They argue that it is a best practice to closely and regularly monitor a plan’s investments, fees and other features. “The act of monitoring itself demonstrates a degree of fiduciary prudence when the sponsor follows a well-documented process,” they write.

Cunningham, Perkins and Terri Schwartz note that plans’ failure to fulfill their fiduciary duties often have “less to do with outcome and more to do with failing to follow a process or maintain adequate documentation” of the process. They suggest that setting forth the monitoring process and documenting it as it is followed is a good way to demonstrate fulfillment of fiduciary duties.

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