The Importance of Retirement Plan Governance

The Importance of Retirement Plan Governance

| January 10, 2023

Board Resolutions

Throughout our almost two decades of consulting and advising on retirement plans, one thing that stands out and is most often missed, is for the Board of Directors (or equivalent) to delegate day-to-day responsibilities of running the plan to the operations team. There is a huge benefit in doing so as the Board of Directors essentially transfers most of their fiduciary risk of managing the plan to the personnel at the company who make and carry out the day to day decisions of the plan. 

The vast majority of retirement plan documents provide rules regarding who is empowered to take action for a plan. The plan document names a plan administrator, a named fiduciary, and usually contains a section that explicitly describes responsibilities for each, when and how to delegate responsibilities, and perhaps even how a committee may be adopted. Typically, these powers are placed in the hands of the organization, the plan sponsor. Ultimately the plan sponsor’s Board of Directors (or equivalent individual or entity) are empowered to act on behalf of the plan sponsor. The majority of plan sponsors create a committee to undertake most day-to-day and recurring responsibilities of the plan. In order to do so within the dictates of the plan document, the Board of Directors (or equivalent) must take formal action to create a committee and effectively delegate responsibilities. This serves to effectively transfer the responsibility and effectively the potential liability that may be associated with said responsibility. This is a way to ensure that the Board of Directors (or  equivalent) are insulated from actions that they are not taking or approving on a day-to-day basis. Those are the primary objectives of the  Board Resolutions.

Committee Charter

As described above, a committee may be delegated certain responsibilities. The Charter best spells out what those responsibilities are, and how the committee is to act. It is essentially a set of guidelines. It also explicitly sets forth exactly what fiduciary responsibilities the committee may be responsible for. In this way it brackets their potential liability against responsibilities that have not been explicitly delegated to them.


The acceptances and resignations/removals are documents created at the individual committee member level. These are created to evidence when an individual accepts the responsibilities delegated to them by the Board of Directors (or equivalent) and when they relinquish them. This serves to bracket the time period for which the individual may be held responsible, and thereby potentially liable, for their plan-related actions.

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 design, creation and review
  • Investment policy statement creation and review
  • Investment menu analysis
  • Annual 100+ point ERISA assessment
  • Implementation of comprehensive fiduciary quality management system
  • Deployment of complete plan governance system including fiduciary indemnification
  • Committee fiduciary training
  • Implementing cybersecurity best practices 
  • Plan design including student debt benefits
  • Complete IRS and CPA audit support - we have ex-auditors on staff!
  • Participant 1:1 and group education
  • Fee benchmarking
  • Ensuring participant retirement readiness
  • Consulting on financial wellness
  • Process creation and documentation
  • Plan design
  • Contribution match modeling
  • Annual plan compliance review

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 We look forward to helping your committee successfully fulfill their fiduciary duties with ease and excellence!