Retirement Plan Sponsor Training

According to ERISA, by sponsoring a retirement plan, you have essentially taken a "Fiduciary Oath".

This means you understand and will comply with the requirements, and... if non-compliant... accept monetary consequence

This course will explain what ERISA expects of you as a retirement plan sponsor, and will provide you with a strong working knowledge of administering a retirement plan

ERISA Overview

Employee Retirement Income Security Act of 1974 (ERISA)

ERISA is a federal law enacted back in 1974 that establishes minimum standards to protect the interests of employee benefit plan participants and beneficiaries.

The primary goals are to:

  • Ensure employees or beneficiaries are well informed about all the options available to them offered with the retirement plan
  • Establish standard conduct for plan fiduciaries
  • Provide for appropriate remedies to employee concerns

This law is enforced primarily by our friends at the:


As a Retirement Plan Sponsor you have taken a Fiduciary Oath!


What does it mean to be a Fiduciary?

  • The employer is held subject to the standards of conduct under ERISA, and is acting soley in the interest of the plan participants and beneficiaries


What are my responsibilities?

  • Be an expert in all  aspects of your retirement plan; known as "Prudent Man"
  • Thoroughly communicate to your employees about the plan
  • Manage or Project manage all plan administration to include contributions, distributions, plan design, competitive fees, investments and process/procedures
  • Be responsive to employee concerns or questions
  • Act prudently for the benefit of your employees and beneficiaries



Risk of ERISA Non-Compliance

ERISA Non-Compliance = High Fines

Fines occur for many reasons:

  • Not sending notices timely
  • Missed or late contributions
  • High Fees
  • Inappropriate investment options
  • Not adhering to plan design
  • Not making prudent decisions
  • Missed or late regulatory filings

Knowledge Check 1

Who does ERISA protect?

  • Plan Participants and Beneficiaries
  • Plan Sponsors
  • Advisors
  • Recordkeepers

Knowledge Check 2

ERISA expects plan sponsors to be a Retirement Plan Expert "Prudent Man".

  • False
  • True

Knowledge Check 3

Identify 2 items that would be considered non-compliant with ERISA

  • High fees
  • Timely communications
  • Missed or late contributions
  • Having a prudent process

Service Providers

Types of service providers

There are  3 basic types of service providers for retirement plans


Local individual that has a good working relationship with the plan sponsor and monitors investments. 


A larger passive company that manages plan data, delivers a web interface and  has reporting capabilities.


Small local companies that provide validation, testing, ERISA and document services.


Good Advisor vs. Bad Advisor

Below is an outline of the expected role of an advisor......Which one would you prefer?

Good Advisor:

  • Key employer contact
  • Annual benchmark of plan fee's
  • Point of escalation
  • Investment due diligence
  • Regular meetings/plan reviews
  • Low commission or fee for service

Bad Advisor:

  • Little to no relationship with employer
  • No fee benchmarking
  • Unresponsive to issues
  • 3rd party investment due diligence
  • No regular meetings/plan reviews
  • High commissions or fees

1) Some advisors receive other sources of revenue or support from recordkeepers.

2) Many advisors may have a bias approach to provider selection due to long term relationships

Third Party Administrator

Third Party Administrator Roles and Fee Types

(a.k.a TPA)

Third Party Administrator (TPA)

  • Maintains plan documents
  • Creates plan amendments
  • Validates eligibility for distributions
  • Sends notices to terminated employees
  • Performs annual non-discrimination tests
  • Calculates annual contributions
  • Calculates Required Mandatory Distributions (RMD)
  • Low fees

Fee Types:

  • Loan Initiation
  • Annual loan maintenance
  • Per participant
  • Distribution 
  • Qualified Domestic Relationship Order (QDRO)
  • Hardship withdrawal
  • Terminated employee
  • Hourly rate

1) TPA Fee's are above and beyond other fees from the recordkeeper

2) Some TPA's receive additional monies from a recordkeeper


Recordkeeper Basics

Think of a a Bank

Common Function

  • Maintains plan data
  • Provides web interface 
  • Provides activity & financial reports
  • Performs money in/money out and investment transactions
  • Staffed call center

Extra Service

  • Full notice delivery
  • Distribution approval services
  • Data link with payroll provider
  • Full TPA services
  • Open investment platform


  • Asset based
  • Per participant
  • Revenue share from investments
  • Invoice the plan sponsor
  • Hourly rate
  • Transactional fees

1) Recordkeeper fee reductions does not typically occur automatically

2) Recordkeepers DO NOT act as a Fiduciary or Trustee to the plan

Knowledge Check 1

The recordkeeper will act as Trustee and Fiduciary to the plan.

  • True
  • False

Knowledge Check 2

Which 2 service providers commonly receive monies from the recordkeeper?

  • TPA
  • Participant
  • Advisor
  • Plan sponsor

Knowledge Check 3

Identify 3 common services of a recordkeeper

  • Call center
  • Review Investments
  • Maintains plan data
  • Perform year end testing
  • Provides web access


Investment Types

There are 3 Basic Investment Types in Retirement Plans

Mutual Fund

  • An registered investment vehicle made up of many similar stocks or bonds.

Separate Account

  • Non-registered investment vehicle, created by insurance companies, made up of many similar stocks or bonds.


  • A single company; either the employer stock or other companies.

Mutual Fund

Mutual Fund & Separate Accounts 101

Basic Structure

  •  Investment vehicle made up of many similar stocks or bonds.
  • A fund manager buys/sells the stocks/bonds to generate an average performance.
  • Fee for company is taken from avg performance
  • Public research on internet

Fee Structure

  • Fee is called "Expense Ratio"
  • Share types:

           1) Retail shares (A, B, C) have very high                         fees

           2) Institutional shares have moderate fees

           3) Zero revenue funds have very low fees

  • Expense structure can provide "revenue share" to advisor or recordkeeper 

Key Differences:

  • Public research available for Mutual Fund ................. Separate account NOT always public
  • Mutual Fund is registered with SEC ............. Separate account is an insurance product
  • Mutual Fund has stated expense ratio ...... Separate account can add "asset charge" or "wrap fee"

1) The DOL expects all plan sponsors to regularly review the fee's to ensure they are not high.

2) Example of fee from company: "Fee is 1%, and avg. annual performance is 11% before fee's; the investor will see a 10% return after fee's)

3) "Revenue Share" is a common way recordkeepers and advisors' receive compensation.


Stock 101

The information below outlines the differences of investing in stock within an Retirement Plan structure.

Stock Fund

  • Like a mutual fund but only has one stock in the fund (usually company stock)
  • You own a unit of the fund not the stock
  • Little research or information available
  • You do not have ownership in the company


  • Direct ownership in the company
  • Outside research available 
  • Value is based on current share price
  • Fees to transact
  • May requires additional brokerage account with annual fee.

1) Stocks can expose participants to HIGH risk.

2) Plan sponsors should use CAUTION when making stocks available within a retirement plan.

Investment Risk

Investment Risk 101

Asset Class

  • Small, Mid and Large Cap identifies the size of the company
  • Value vs. Growth 

            1) Value:  the                                        investment price                            is perceived low

           2) Growth: investment                    is priced appropriate                   and may provide                           consistent return         

  • Bond:  investment that loans money to a company 


  • Small companies are typically riskier than Large companies.
  • Value can be riskier than Growth.
  • Bonds are affected by market conditions and company credit worthiness 
  • Foreign /Emerging are risky because they face political risk and company risk


  • Lower the risk, lower the return; Higher the risk; potential for higher return. No Guarantee of positive returns
  • Money market is designed to preserve principal
  • All asset classes will have varying returns.

1) Company Credit worthiness: Bad credit= Risk

2) In most cases bonds perform opposite of stocks: When stocks are up bonds are down

Asset Allocation

Asset Allocation & Diversification

  • Asset allocation:  Investing in most of the asset classes. 
  • Diversification:  Investing in different industries and investment types.

        It's like the game of BASEBALL, wherever the ball is hit, there's a player nearby To Catch the Ball

Why Asset Allocate & Diversify?

  • Every asset class performs differently
  • Every sector or industry performs different
  • Timing the market doesn't work
  • Reduce risk
  • It exposes an investor to all segments of the market

1) Many tools and resources are available to help participants select appropriate mix of investments.

3) Diversification can also mean different mutual fund managers.

Target Date Funds

Target Date Basics

  • Acceptable Qualified Default Investment Alternative (QDIA)
  • Asset allocated based on investor age using date of birth
  • Automatically re-balances as investor gets closer to retirement
  • A mutual fund made up of mutual funds 

1) Most common QDIA

2) Re-balance of these funds make them more conservative when the investor is closer to retirement.

Knowledge Check 1

What type of Mutual Fund is allocated using the Date of Birth?

  • Large Cap Growth
  • Target Date
  • Life Style
  • Money Market

Knowledge Check 2

What game is asset allocation best compared?

  • Football
  • Soccer
  • Tennis
  • Baseball
  • Golf

Knowledge Check 3

What is the fee for a "Mutual Fund" called?

  • Sticker price
  • Cost
  • Commission
  • Expense Ratio


Fee Structure

Fee are broken down into three categories


A stated expense ratio and/or wrap fee/asset charge will be deducted from investment performance prior to receiving fund performance.

Participant Accounts 

A stated % or $ amount or transaction fee can be deducted from an account on a regular or ad-hoc basis.

Sponsor Invoice

An agreed amount can be invoiced to and paid by the plan sponsor on a regular or ad-hoc basis.

Performance Based Fees

Performance Fees

  • Expense ratio deducted from return
  • Asset charge and wrap fee deducted from return 
  • Deduction occurs for both positive and negative returns

Participant Account fees

On-going Fee

  • Stated participant fee deducted monthly, quarterly or annually
  • Ad-hoc fee (any amount; any time) decided by plan sponsor
  • Dollar amount based on a % of account balance monthly, quarterly or annually


  • Fee to process request deducted from account
  • Fee to process request deducted from a physical check amount
  • Using advice service, % of account balance deducted monthly, quarterly or annually

Participant Transaction Types

Common participant transactions with fees

  • Withdrawal

  • QDRO's

  • MRD's

  • Loan Initiation

  • Loan Maintenance

  • Hardship

  • Rollover

  • Excess Distribution

  • Advice Service

1) These transactions can have double fee's one from the TPA and another from the recordkeeper

Sponsor Invoice

Sponsor Invoice

  • A stated amount billed to sponsor
  • Specific participant transactions 
  • Hourly research or service
  • Employer contribution calculations

Knowledge Check 1

What is an example of a fee that would be invoiced to the sponsor?

  • Research
  • Advice fee
  • Participant transaction
  • Performance Fee

Knowledge Check 2

Please choose the 3 types of fees discussed in this section?

  • Performance Based
  • Sponsor Invoice
  • Commission
  • Participant Account

Knowledge Check 3

A fee can be deducted from an physical check requested by participant.

  • False
  • True

Contribution Handling

Contribution Definition


An amount of salary (percentage or dollar) that an eligible participant has requested the employer to deduct and deposit into the retirement plan on their behalf. 

Also includes, any promised employer matching based on the participant decision to have a salary reduction.

Contribution Timing

 The most IMPORTANT role of a plan sponsor:

"Submitting Salary Reduction Contributions"

**There are 2 timing standards dependent on the size of the employer**

Plans Less Than 100 Participants

  • Deposited no later than the 7th business day following withholding by the employer.

Plans Greater Than 100 Participants

  1. Deposit "as soon as it is reasonably possible" to separate them from the company’s assets.
  2. But, no later than the 15th business day of the month following the payday. 

Missed Contribtuions

Missed Contribution Examples

  • Did not submit contribution
  • Missed due date of 7th or 15th
  • Fail to implement employee affirmative election
  • Fail to automatically enroll
  • Fail to give employee opportunity to make affirmative election

1) In many circumstances,  having the contribution amount separated  from the company’s assets complies with the timing standard

Error Correction

Correction for Auto Enroll Plans

  • Allowed within 9.5 months of failure
  • Employer identified: Remit match contributions with earnings no later than 9.5 months after missed payment.
  • Employee identified: Remit match contributions with earnings no later than last day of month after the month of notification.

After 9.5 months of failure

  • Remit either 25% or 50% (significant failure) of missed deferral opportunity; employer match contribution plus earnings on both.

Correction for Non-Auto Plans

  • Allowed within 3 months of failure
  • Employer identified: Remit match contributions with earnings no later than the last day of the 2nd plan year following the plan year where the failure occurred.
  • Employee identified: Remit match contributions with earnings no later than last day of month after the month of notification.

After 3 months of failure:

  • Remit either 25% or 50% (significant failure) of missed deferral opportunity; employer match contribution plus earnings on both.

Knowledge Check 1

What is the best answer to remain compliant with contribution timing?

  • The 15th of the month
  • The 7th of the month
  • As soon as reasonably possible
  • 30 days

Knowledge Check 2

What is the most important role of a Retirement Plan Sponsor?

  • Gaining access to a website
  • Submitting salary reduction contributions
  • Running a report
  • Having lunch with my advisor

Knowledge Check 3

What is the highest percentage of missed salary deferrals required to be replaced by a plan sponsor through a significant failure?

  • 10%
  • 100%
  • 50%
  • 25%


Notice Requirement

Notice Responsibility

As a retirement plan sponsor, one of your KEY responsibilities under ERISA is to ensure employees and/or beneficiaries are well informed about their retirement plan options available through the employer.

Types of Notices

3 Categories of Notices


These notices are required to provide regulatory information to newly eligible participants.


These notices are required to provide regulatory information to eligible participants.


These notices are required to provide any changes to the plan.

Initial Notices

Initial Notices

  • Enrollment kit 
  • QDIA & 404(c)
  • Auto Enroll notice
  • Fee disclosure
  • Safe Harbor
  • Summary plan description (SPD)


1) The enrollment kit typically includes most notices; but, NOT all of them.

2) Summary Plan Description (SPD) is most commonly missed

Ongoing Notices

On-Going Notices

  • QDIA
  • Auto Enroll/Escalate
  • 404(a)5 Fee disclosure
  • Quarterly statements
  • 5 year SPD
  • Summary annual report
  • Safe Harbor

1) Annual Auto and "QDIA" is required if participant was auto enrolled and never made additional changes throughout the year

2) The mailing population is considered: All eligible, with or without a balance and all statuses with a balance (includes terminated employees).

Change/Update Notices


  • Summary of material modifications (SMM)
  • Investment change notice and Fact sheets
  • 404(a)5 Fee disclosure
  • Plan corrections or errors
  • Sarbanes Oxley (Black out notice)

Timing of Notices


  • Generally 30 days prior to eligibility; or as soon as administratively possible


  • SPD no later than 90 days following eligibility
  • Investment related information is before they can direct investments for the first time


  • Auto Enroll/Escalate; QDIA and Safe Harbor: 30 days prior to plan year end
  • 404(a) 5 fee disclosure: same time annually.
  • Summary Annual Report: Within 9 months after the end of the plan year or 2 months after the annual report filing deadline


  • Investment changes: 30 days prior to the effective date of the change
  • SMM: within 7 months of the plan year in which the changes were made
  • 404(a)5: 30 Days prior to the effective date of the pricing or fee's change
  • Blackout notice: 30 days prior to the beginning of the blackout

1) Common missed notices are the SPD and SMM.

2) Common timing is 30 days; but no more than 90 days out.

Knowledge Check 1

What is the most common notice timing?

  • 90 days
  • 30 days
  • 45 days
  • 120 days

Knowledge Check 2

How many days after eligibility can the initial summary plan description (SPD) be sent?

  • 60 Days
  • 90 Days
  • 30 Days

Knowledge Check 3

Which participant population should receive on-going notices? 

  • All eligible participants'
  • All eligible participants' with or without a balance
  • All eligible participants' with or without a balance, and all participants' with a balance even terminated

Distribution Management

Distribution Types

Participant Withdrawal Options

  • Loans
  • Hardship Withdrawals
  • In-Service Withdrawals
  • Rollovers

Hardship Approval Requirements

Hardship Withdrawal

  • Must be an Immediate and Heavy financial need
  • Vested money only
  • Must exhaust all other distribution options
  • Must have supporting documentation
  • Approval from plan sponsor

Common Acceptable Financial Needs:

  1. Medical expense
  2. Purchase of a new home
  3. Education
  4. Prevent eviction
  5. Burial expense
  6. Home repair expense

1) Plan Sponsor is typically responsible for gathering and reviewing supporting documentation for Hardship Withdrawals

Other Distributions


  • Cannot exceed 50% of vested account balance
  • No more than $50,000
  • Cannot exceed number of allowable loans


  • Typically Age 59 1/2
  • Vested balance  
  • Source exception may apply (i.e. After Tax)


  • Terminated employee, or
  • Beneficiary, or
  • Age 59 1/2 or older; or
  • Prior rollover source. 

1) Please know that Required Mandatory Distributions (RMD) are the participants' responsibility when older than 70 1/2.

Knowledge Check 1

An employee doesn't have to exhaust all distribution options before requesting a Hardship Withdrawal.

  • False
  • True

Knowledge Check 2

What is the common age allowed to request an in-service withdrawals?

  • 65
  • 59 1/2
  • 60
  • 70 1/2

Knowledge Check 3

At what age do participants need to start taking the required mandatory distribution (RMD)?

  • 59 1/2
  • 65
  • 70 1/2
  • 45

Plan Design

Plan Design Basic Elements

Most Common Areas of Plan Design

  • Eligibility- "When" and "What" type of employee can join the plan
  • Employer Contribution- Employer promise to fund employee account
  • Employee Contribution- Options for employees to select "pre-tax"or "after tax" options.
  • Vesting- Percentage of employer contribution available to an employee prior to achieving a specific service date.

1) There are many variables within each of these areas; by changing one could affect another

Eligibility Basics

Service Requirement:

  • Immediate
  • 30 days
  • 60 days
  • 90 days 
  • 1 Year, 1000 hrs

Entry Dates:

  • Daily
  • Monthly
  • Quarterly
  • Semi-annual
  • Annual

Employee Exclusions:

  • Union
  • Part time
  • Specific classification
  • Non-resident
  • Age (no greater than 21

1) Participant eligibility is the combination of the service and the entry date; whichever is greater.

2) Exclusions must be clearly defined in the plan document.

Contribution Types

Participant Contributions

  • Pre-tax deferral
  • Roth deferral
  • After tax deferral
  • Rollover (Pre-tax/Roth)

Employer Contributons

  • Employer match 
  • Safe Harbor (Match or NEC)
  • Employer non-elective (Profit Share)
  • Qualified non-elective (QNEC)

1) Plan sponsor can set limits on deferrals. EXAMPLE: no more than 75% of salary

2) There are 2 types of employer match:

                                   Discretionary: permits employer to informally stop match at will

                                     Required: changes to the match require an amendment.

Safe Harbor Overview


  • Notice must be delivered 30 days prior to new plan year
  • Design must continue for full plan year
  • Can exclude highly compensated employees
  • Monies are 100% vested

1) Purpose of Safe Harbor is to satisfy the non-discrimination testing regardless of actual results

Types of Safe Harbor contribtuions

3 types of Safe Harbor contributions

Employer matching

  • Per pay period
  • 100% vested
  • 2 common  Types:

Basic Match= 100% up to 3% deferrals;  then 50% on next 2 deferral %'s

Enhanced= 100% up to 4,5 or 6% 

Employer match with Auto Enroll provision

  • Per pay period
  • 3% auto enroll with 1% escalation
  • 100% up to first 1% deferral; then 50% on next 5% in deferrals (3.5% total match)
  • 2 year cliff vesting

Employer Non- Elective

  • Per pay period or annually
  • 3% contribution
  • 100% vested

Auto Enroll

Basics of Auto Enroll

  • Employee must opt-out or change default deferral amount
  • Employer selects default deferral amount
  • Auto deferral increase option available
  • Investment default typically "QDIA"
  • Must provide notice

Knowledge Check 1

What is the maximum age that can be used to determine eligibility?

  • 18
  • 21
  • 16
  • 19

Knowledge Check 2

Select 2 participant contribution types.

  • Safe Harbor
  • Roth
  • Non-Elective Contribution
  • Pre-Tax
  • QACA

Knowledge Check 3

Under normal circumstances you can stop Safe Harbor contributions at any time.

  • True
  • False

Non-Discrimination Testing

Employee Types

For Testing Purposes Employees are classified into 3 groups

Non-Highly Compensated (NHEC)

  • Eligible to participate in plan
  • Earns less than $120k

Highly Compensated (HEC)

  • Eligible to participate in plan
  • Earns $120k or greater; or,
  • Owns more than 5%.
  • Family member of owner

Key Employee

  • Eligible to participate in plan
  • Owns more than 5%; or,
  • Owns 1% and earns $150k; or, Officer earns $175k or more.
  • Family member of owner

1) Relationship to owner for family member attribution is: Mother, Father, Son, Daughter, Grandmother, Grandfather


3 Key Non-Discrimination Tests

Actual Deferral/Contribution Percentage tests 

         1) Average of all NHCE's deferral %;                               compared to  of HCE avg. deferral %. 

         2) Test fails if difference is greater than 2%                 points in deferral %; or if, the HCE's are                    greater than 125% of the NHCE                                   average

Top Heavy

  • Based on plan year end balance
  • Compares plan year end total balances of HCE's to plan balance of the same plan year end
  • Test fails if HCE's have greater than 60% of year end plan assets.

Additional Tests

More Tests:

  • Benefits Rights and Features
  • 414(s) Test
  • Control Group or Affiliate Service Organization
  • Annual Additions 415
  • Elective Deferrals Limit 402(g)

1) Some of these tests are dependent on you plan design and organizational structure

2) Reminder a Safe Harbor plan design may deem you to satisfy the tests regardless of the results

Correcting Test Failures

Basic correction methods for common test failure

ADP/ACP Failure

  • Qualified Non Elective Contribution (QNEC)= Fully vested employer contribution significant enough to satisfy the test.
  • Excess Distribution: HCE have a portion of their contributions sent to them to a level that satisfies the test
  • Due 2 1/2 months following the end of the plan year

Top Heavy Failure

  • QNEC= Fully vested employer contribution to true up non-key employees to a minimum of 3% in deferrals.
  • Due end of plan year
  • Distributions throughout the year are brought back in for testing

1) Any HCE over age 50, can keep the amount of catch up deferral for that plan year; without the risk of having that amount distributed

Knowledge Check 1

How much does an employee need to earn to become a HCE?

  • $18,000
  • $120,000
  • $265,000
  • $95,000

Knowledge Check 2

Identify the 3 employee types for testing purposes

  • Highly Compensated Employee
  • Key Employee
  • Part Time
  • Non-Highly Compensated Employee
  • Intern

Knowledge Check 3

What test compares the balance of the key employees to the total plan assets?

  • Top Heavy
  • Actual Deferral Percentage
  • 402g
  • Actual Contribution Percentage

Filing Requirement/Error Correction

IRS Form 5500

Form 5500 is used to report the plan Financial condition, Investments and Operations.

5500 filing basics

  • Must file electronically at: efast
  • Due Last Day of the 7th month following the plan year end.
  • Form 5558; extension no later than the 15th day of the 3rd month after due date
  • Form 8955-SSA identifies terminated employees with a balance.
  • Short form less than 120 employees
  • Large plan filer greater than 120 employees; and requires; "Accountant Opinion"

1) An accountant must audit plans greater than 120 employees and write a summary known as the "Accountant Opinion"

2) There is a 80 -120 rule for determining if the employer needs to be a short form or large plan filer.

             * Employer not forced to file as a large plan until 120 employees is achieved (but could elect to be one at 100 employees); and,

        * Employer not be forced to file a short form until 80 employees is achieved (but can choose anytime at 100 employees)

IRS Correction programs

Correcting your plan mistakes through available correction programs will manage the plan’s tax-favored status.

Self Correction

  • Insignificant Operational Failure
  • Corrected by the end of the second year
  • Follow IRS guidelines of correction
  • No IRS required filings
  • Cost based on guidelines no traditional fines

Voluntary Correction Program

  • Negligent Operations: Not following terms of plan documents... Not complying with tax laws... Not maintaining documents.
  • Must file IRS forms and outline description of failure
  • IRS must approve
  • There are standard fines

Knowledge Check 1

How must the 5500 be filed?

  • Mail
  • Electronic using efast
  • Mail an Electronic
  • Fax

Knowledge Check 2

Identify the 2 types of correction programs.

  • Self Correction
  • Third Party Correction
  • Voluntary Correction
  • Amendment

Knowledge Check 3

Which correction method requires IRS filings and IRS approval?

  • Self Correction
  • Voluntary Correction

Due Dligence

"Prudent Man"

You have taken a "Fiduciary Oath" by sponsoring a Retirement Plan

Now you have an obligation to make prudent decisions on behalf of your employees


Retirement Plan Expert

  • Become a student of the industry
  • Ask Questions
  • Leverage resources from providers
  • Gather opinions
  • Operate for the benefit of participants

1) ERISA expects the plan sponsor to follow specific standards of conduct, have a strong working knowledge of retirement plans and make sound decisions for the benefit of their employees.

Prudent Process

Staying Organized and Informed


  • Store in a single location
  • Ensure all documents are current and updated as applicable
  • Verify signatures
  • Review agreements and contracts
  • Investment Policy Statement


  • Submit contributions timely
  • Create process for receiving and making deferral changes
  • Communicate thoroughly and timely
  • Respond to all inquiries


  • Annual Benchmarking 
  • Review Plan Data & Investments annually
  • Form Investment Committee
  • Monitor Investments for appropriateness, poor performance and high fees

1) The #1 Priority for plan sponsors is to ensure participant contributions are submitted timely

Vendor Management

Vendor Due Diligence

  • Meet on a regular basis
  • Know all your contacts
  • Benchmark their fees every 3 years
  • Evaluate level of service
  • Leverage them as a resource

Knowledge Check 1

What is the #1 priority for plan sponsors?

  • Meeting with the advisor
  • Submit participant contributions timely
  • Asking the TPA for advice
  • Having an enrollment meeting

Knowledge Check 2

I do not need to create an investment committee and have an investment policy statement

  • False
  • True

Knowledge Check 3

Who should have immediate access or paper copies of all plan related documents?

  • Advisor
  • Recordkeeper
  • Plan Sponsor
  • Participant

Course Completion

Certificate of Completion

Request Course Certificate

Email: [email protected]


  • Full Name
  • Company Name
  • Date Course Completed 
  • Copy of overall status showing 100%