Guide For 401(K)
I. Fiduciary Responsibilities
- Have you identified and documented all Plan fiduciaries?
- Does the Plan Sponsor have all fiduciaries’ acknowledgments in writing?
- Does the Plan have a 3(21) and/or a 3(38) fiduciary advisor?
- Have all fees associated with the Plan been disclosed and deemed “reasonable”?
- Do you hold quarterly/annual fiduciary meetings with recorded minutes and documented plan review?
- Does your Plan offer prudent and diversified investment options?
II. Investment Review
- Does the Plan intend to comply with ERISA 404(c) regulation to protect the Sponsor from participant losses?
- Have the participants received a written explanation from a plan fiduciary that the plan intends to comply with ERISA 404(c)?
- Has the plan adopted a written Investment Policy Statement (IPS) establishing and documenting prudent investment processes?
- Does the Plan Sponsor have a quarterly/annual investment due diligence report on file, showing you are fulfilling your fiduciary responsibility to monitor investment performance in accordance with the IPS?
III. Plan Administration
- Does the Plan operate in strict accordance with all Plan documents?
- Are the Investment Policy Committee and Plan fiduciaries reviewing and documenting, at least annually, the following items:
- The process of collecting and depositing employee contributions in a timely manner;
- Updating the Summary Plan Description (SPD) for all Plan design changes and notices distributed to all participants;
- Fidelity bond for the appropriate amounts and that it covers Plan fiduciaries;
- All outside experts and service provider fees and fulfillment of duties in accordance of ERISA 408(b)(2) regulation;
- Comprehensive Report of vital Plan statistics.
IV. Participant Communication
- Are quarterly/annual group educational meetings available?
- Is a Fiduciary Investment Advisor available to participants?
- Is the Qualified Default Investment Account (Q.D.I.A.) appropriate for the Plan and disclosed to participants?
- Is the Plan in compliance with all ERISA 404(a)(5) participants’ fee disclosure requirements?
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