Pentegra :: Your Fiduciary Role In Evaluating Your Retirement Plan



Retirement plans represent a substantial financial investment for employers. The right retirement plan can help you attract, retain and motivate employees…which ultimately help to drive your business.

That's why it's so important to make sure to maximize your retirement plan investment. And measuring your plan's success is more than simply evaluating plan deferral and participation rates-it's also critical to evaluate your program in terms of the degree to which your program meets your fiduciary responsibilities.


Are you comfortable with the level of fiduciary risk you and your Board assume?

Today, more than ever, fiduciary responsibility is a major concern for business leaders. Your retirement plan must meet all fiduciary responsibilities and comply with IRS and DOL regulations. Under ERISA, retirement plans are considered separate entities that must be managed solely in the interest o f the plan and its beneficiaries. Under ERISA, as a Board member you are personally liable for each fiduciary breach - the employer's assets cannot shield an individual from liability when that individual is acting as a fiduciary.

While most plans have an investment policy statement, having a formal, documented investment governance process is a challenge for many plan sponsors. If your plan is ever challenged in the courts, you'll need to be able to demonstrate that your plan complies with the investment policy statement, that you've documented the process and monitored the plan's investment options.

Are you able to readily determine all retirement plan expenses, including those associated with your plan's investments?

One of the more critical fiduciary duties is to completely understand plan fees and expenses, in terms of who bears the cost of plan fees and how fees are paid. Plan fees can range from administrative charges for plan services to investment fees and sales charges, including commissions, 12b-1 fees, brokerage account fees, investment fund loads (front end, back end, contingent deferred sales charges (CDSC), wrap fees and investment advisory fees.) Fees also can include transaction charges paid by the individual participant.

A plan review presents an opportunity to evaluate plan expenses, particularly if you are interested in reducing retirement plan expenses or seek to change your company's financial commitment as a result of economic conditions to redesign your retirement program in a more cost-effective manner, maximizing your benefits dollars.

Does your plan compare favorably against industry standards?

Typically, plan success is measured in terms of participation rates, deferral rates and overall asset allocation. Beyond these factors, consider whether your participants contributing at a rate that will meet their retirement goals, and whether plan education strategies are aligned with your plan's demographics. Have you considered the many new design options available-including plan designs that allow you to reward different employees at different levels, or safe-harbor options to avoid top-heavy plans that limit the deferral options for your key executives? Have you thought about automated design features that affect participant behavior and tend to have a positive impact on plan participation?

Do you offer an investment strategy, or a mere inventory of funds?

Studies continue to show that asset allocation decisions account for more than 90% of the variability of a portfolio's investment over time. 2 At the plan level, where are most of the plan's dollars invested? Do you feel that your plan's overall asset allocation is aligned with your institution's demographics? Do you offer Target Date Funds? A plan review offers a perfect opportunity to review your program's investments, and determine if they are appropriate for your organization.

Do your employees appreciate and understand your retirement plan?

Maximizing participation and employee understanding is key to maximizing your retirement plan investment. That involves evaluating how employees are utilizing plan features, and ensuring that the plan's key benefits are communicated early and often. It's more than just increasing participation rates-it's ensuring that your employees understand how to use the plan to ensure retirement benefit adequacy and security.

A retirement plan evaluation is a worthwhile investment in your business.

With the myriad of legislative and technical regulations, it's often a challenge to understand how to best design a program that maximizes your retirement investment in a way that meets your fiduciary obligations as a plan sponsor. Pentegra can help. Pentegra provides this consulting service free, to help determine what's best for you and your employees.

Our comprehensive retirement plan review includes:

  • Plan design consulting
  • Investment policy and platform review
  • Compliance review
  • Fiduciary checklist
  • Education Evaluation
  • Fee analysis.

As an ERISA-named plan administrator and principal fiduciary for more than six decades, Pentegra has been helping business leaders like you evaluate and structure retirement plans that meet the fiduciary needs of your organization. Let Pentegra guide you in developing a plan that maximizes your investment, and meets your fiduciary responsibilities.


  • Does your retirement plan have an updated IRS-approved document in place?
  • Has your plan been designed so it is customized to meet the needs of your company?
  • If you, your family or company have ownership rights in any other businesses, have you received advice concerning the possible consequences to your plan?
  • Are the plan fiduciaries aware of their responsibilities under ERISA?
  • Have the plan's investment fiduciaries been appointed in accordance with the plan and trust documents?
  • Do your plan committee members and other fiduciaries meet at least annually?
  • Is a due diligence file maintained with information and supporting documentation for plan and investment decisions made at the fiduciary meetings?
  • Do the plan fiduciaries ensure the plan collects and invests the employee deferrals as timely as possible?
  • Is your plan covered by a fidelity bond? Does your plan have a written Investment Policy Statement?
  • Does your plan have investments covering a broad range of investment categories?
  • Have the plan fiduciaries reviewed the plan's investments in the last 12 months?
  • Was the review documented?
  • Do you fully understand all investment costs and the services provided for those costs? Has an investment from your plan been removed or placed on "watch" because it has underperformed?
  • Does your plan provide employee enrollment and education programs explaining the importance of participation, saving for retirement and investment basics?
  • Does your plan provide lifestyle funds or asset allocation models for employees who lack investment knowledge?
  • Have all participants received information about each of the options available in the plan?