Process and documentation

It would be nice if there were a tidy mathematical formula that employers could use to make everything about their 401(k) plan run perfectly. While there are aspects of the plan such as following the provisions of the plan document that are pretty clear, hiring plan service providers as well as selecting and monitoring plan investments inherently involve uncertainty. The future is always uncertain by definition.

When selecting service providers and investment managers the most important ingredient is the process you used in your decision making. Why did you select this particular recordkeeper or third-party plan administrator? On what criteria did you base the selection of investments in the plan? Should it become necessary to answer these questions in a Department of Labor audit you aren’t required to be correct in all of your assessments but you need to be able to show what process you used to arrive at your conclusions. Fiduciary care is largely about process and documentation.

How do you develop and implement this process? Consider hiring a well-qualified and experienced advisor.

Subject Reference Information