401k Retirement Committees have a huge responsibility to perform. These 401k Retirement Committees also have a strong duty to plan participants.
The primary responsibility of fiduciaries is to function solely in the interest of participants and beneficiaries. There are many different tasks and processes that contribute to the overall success of a retirement plan. All 401k retirement committees can be a major contributor to the success of a retirement plan. This helps contribute to the success of each of the plan participants.
At a TPSU program held at SMU in Dallas, Ms. Cynthia Lewis, the senior retirement benefits manager, at a 15,000-employee company explains what happens at their retirement committee and what she believes would help them to maximize their time.
Ms. Lewis discusses what occurs during their regularly scheduled – very busy – 401k retirement committee meetings. Two hours for an investment review meeting may seem like a large block of time, when discussing a 90 day period of investment performance, participant needs, financial wellness and retirement readiness. However, two hours is frequently not sufficient. It is very important to allocate a proper amount of time to each of these topics – and leave some time for ad hoc issues.
Even meeting quarterly for two hours, the committee usually runs out of time to cover important issues beyond investments and new laws or trends. The benefits manager would like to reserve time for each of her key advisors to address topical issues that are relevant to her organization. Consider sending a report highlighting key issues before the meeting to save valuable time.
Benefit Managers tend to return to TPSU because they enjoy the content. Attendees also enjoy bringing quality ideas back to their 401k retirement committee. Any time a committee can limit or manage fiduciary liability, the 401k retirement committee is well served.
Full Transcript Below:
Fred Barstein: This is Fred Barstein with 401k TV in Dallas at SMU on campus where we’ve just completed a TPSU program here with Cynthia. Welcome, Cynthia.
Cynthia Lewis: Thank you. Nice to see you again.
Fred Barstein: Nice to see you. Okay if we ask you a few questions?
Cynthia Lewis: Absolutely.
Fred Barstein: Very good, so before we start just tell us a little bit about how many employees you have and your role at the company.
Cynthia Lewis: Sure, I’m a senior retirement benefits manager and we have approximately 15,000 active live employees.
Fred Barstein: Right, that’s a lot of responsibility.
Cynthia Lewis: It’s a lot of programs.
Fred Barstein: One of the things you brought up at the program was about maximizing the time at your retirement committee. Some of the things you said should be done in person, some could be done and just send out reports before. Let’s talk about the two things.
Cynthia Lewis: Sure. As we know, we all try to have four governments committee meetings a year and bring together the key government’s committee members and the outside advisors.
Fred Barstein: Right.
Cynthia Lewis: But the executives, very busy, maybe a two-hour meeting, that maybe gives everybody 30 minutes and you’re trying to review a quarter’s worth of materials, investments, participation, stock funds, there’s a lot of things covered in a short amount of time. We haven’t met for 90 days, here we are again trying to do it. I’ve been thinking about trying ways to make those meetings most beneficial. Things we have to cover, obviously the investment performance, trends, any red flags, watch list funds. We need to carve out time with those service providers. We need to supplement ways so they would gain knowledge. We need to address topics. Maybe if we could talk to our investment advisors about bring your top three topics that aren’t the normal topics.
You want to talk about the extreme investors. What can we do to get those people that are only in one fund? Maybe we need a white paper from an investment advisor that, your funds are good but maybe you need to do a drill down. Maybe you need to have some supplemental lunch meetings. Just throughout the year keep it fresh instead of just trying to stop and thinking you can accomplish everything in two hours.
Fred Barstein: Even on the investments you might be able to accomplish a lot of with, before the meeting, go over it for five or 10 minutes. “Anybody have any questions?”
Cynthia Lewis: Yes, yes.
Fred Barstein: Because the reality is your advisor, for the most part you’re gonna take their recommendation.
Cynthia Lewis: Yeah.
Fred Barstein: And if you have any questions this is the time to bring it up.
Cynthia Lewis: Well, that’s a good point because as an example you typically take their advice but there can be a segway. A fund was proposed to be on a watch list, didn’t have anything to do with performance because the money manager, investment managers are changing.
Fred Barstein: Right.
Cynthia Lewis: Our committee didn’t want to put it on a watch list. If we had had a prep meeting, we could have had a more productive meeting while we were discussing this.
Fred Barstein: If you would have had material sent to you before you could review-
Cynthia Lewis: Right.
Fred Barstein: -versus taking the valuable time with the committee. That’s great. So you’ve been here a couple of times.
Cynthia Lewis: Yes.
Fred Barstein: Today what are a couple of things you might want to take back?
Cynthia Lewis: It’s always very important to me to help because I report to governments committee to stay on top of fiduciary responsibility so that I can, in turn, help them, remind them of what their responsibilities are. One of the most beneficial things is meeting with fellow plan sponsors because they’re talking about, and we all have the same problems, we all want to help people plan for retirement. What’s working? What’s not? And picking up new ideas, it’s like wow, that’d be easy. I’m excited to go back to the office and say, “Let’s try this.”
Fred Barstein: It’s more valuable to hear from a colleague, right?
Cynthia Lewis: Yes. When you hear from your peers as opposed to the experts, obviously we value their expertise but you know your fellow plan sponsors are living in the trenches with you.
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