Do We Need a Retirement Plan Committee Charter?

Do We Need a Retirement Plan Committee Charter?

| February 24, 2022
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Why Should We Have a Committee Charter?

Although not legally required by ERISA, a retirement plan committee charter is a very important document for plan governance that may help fiduciaries avoid potential liabilities. Committee Charters are one effective way to “evidence” intent of prudent plan management. Having a charter is a “best practice” that all plan sponsors should seriously consider.

Your committee charter is the road map for fiduciary oversight of the plan. They document the delegation of responsibilities to co-fiduciaries from the plan’s named fiduciary (oftentimes the organization itself, as represented by the board of directors, owner, or other controlling individual or entity). In turn, it is a best practice to have these fiduciaries acknowledge in writing that they formally accept the responsibilities delegated to them. This documentation helps to properly bracket which individuals are responsible for which fiduciary responsibilities and the timeframe for which they are responsible.

An investment committee charter should reference the design, adoption, and regular review of a plan’s investment policy statement, which sets forth processes and guidelines for how plan fiduciaries will select and monitor investments.

A retirement “steering committee” charter would delineate the administrative responsibilities required of the plan administrator in overseeing the plan. If the plan does not have a separate investment committee, the steering committee should also include investment responsibilities. A retirement steering committee charter will typically encompasses additional responsibilities for the plan oversight of testing, oversight of service providers, and determination of reasonableness of fees.

The Retirement Learning Center says the charter should cover the following points:

  • What authority does the committee have?
  • What is the committee’s purpose?
  • How is the committee structured?
  • Who may serve on the committee?
  • How are committee members replaced?
  • How will the committee delegate authority?
  • How will the committee assign responsibilities and duties?
  • How frequently will the committee meet?
  • What procedures will the committee follow?
  • What are the standing agenda items and how are new topics introduced?
  • What is the process for selecting and managing plan service providers?
  • What reporting will the committee do and to whom?
  • What are the procedures for protecting committee members financially?

Charters are very helpful for ensuring that all committee members understand their responsibilities and that nothing slips through the cracks.

If you'd like Stonebridge to draft a committee charter for you or you'd like to review our template, please let us know - contact information is below!

How Stonebridge Can Help

It can be a bit overwhelming to administer a company retirement plan, given all the documentation nuances let alone the deadlines! At Stonebridge Financial Group, we work exclusively with retirement plans and can help you with everything from designing to running your plan. Delegating fiduciary responsibilities can be a great solution for plan sponsors who lack time and the knowledge of ever-changing requirements to manage a retirement plan -- it's is all we've done since our inception back in 2004! Our robust service offering starts with ERISA 3(21) and 3(38) services and is the tip of the iceberg. We are consultants that help you with every aspect of your plan:

  • Plan governance including the committee charter and investment policy statement
  • Fee and plan benchmarking
  • Implementing cybersecurity best practices 
  • Ensuring participant retirement readiness
  • 1:1 and group participant education and retirement readiness meetings
  • Consulting on financial wellness
  • Committee fiduciary training
  • Process creation and documentation
  • Plan design
  • Contribution match modeling
  • Annual plan compliance review
  • And so much more

We become your outsourced retirement plan officer who dives into the morass of retirement plan details and resolves issues so you don't have to!

Please click here to schedule a short call, give us a call at (855) 530-0500 x601 or email info@stonebridgefinancialgroup.com. We look forward to helping your committee successfully fulfill their fiduciary duties with ease and excellence!

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