Running a retirement plan involves a lot of moving pieces—service providers, investment options, fees, compliance requirements—and it’s easy for fiduciaries to get so deep into the details that they lose sight of the bigger picture. But according to a recent article penned by ERISA attorney Carol Buckmann of Cohen & Buckmann, a New York-based executive compensation and benefits law firm, most governance failures come down to a handful of recurring mistakes.
Mistake #1: Failing to clearly designate responsibilities. When committees, outside advisors, and internal staff all have a hand in plan operations, things can slip through the cracks if no one knows exactly who owns what. Committees should have charters that define their scope, and any responsibilities delegated to employees—like the head of HR—should be spelled out clearly.
Mistake #2: Not hiring the right professionals. Compliance and investment selection have grown more complex, and few plan sponsors have the expertise to go it alone. Yet small business owners often resist giving up control, and other employers hesitate to add costs. That reluctance can lead to violations and make the plan a litigation target. The fix: hire professional fiduciaries after a focused search, work with advisors who acknowledge fiduciary status in writing, and consider options like 3(16) administrators, 3(38) investment managers, OCIOs, or pooled employer plans.
Mistake #3: Treating the plan as set-it-and-forget-it. Fiduciaries have an ongoing duty to review provider performance, benchmark investments, and confirm that fees are reasonable. That means scheduling regular reviews, running periodic RFPs—even when you’re satisfied with your current provider—and replacing underperformers.
Mistake #4: Ignoring new developments. Tax and ERISA rules shift constantly through legislation, regulations, and case law, and penalties for noncompliance can be steep. Plan fiduciaries should schedule regular briefings with advisors and counsel, and pay attention when recordkeepers flag legal changes that affect administration.
Mistake #5: Operating without written policies and procedures. Knowing your responsibilities isn’t enough if you haven’t mapped out how they’ll be fulfilled in practice. Written policies—for investments, cybersecurity, missing participants, and more—provide a roadmap for compliance and matter when auditors come knocking.
Mistake #6: Skipping self-audits. Too many fiduciaries assume that if the recordkeeper hasn’t flagged a problem, everything is fine. But recordkeepers aren’t legally responsible for plan mistakes, and errors caught early are cheaper to fix. Periodic self-audits by a third party—not the current recordkeeper—can surface administrative errors and identify fiduciary procedures that need tightening.
The through-line across all six: governance failures rarely happen because fiduciaries don’t care. They happen because the basics get crowded out by day-to-day demands. Getting the fundamentals right doesn’t guarantee a perfect plan, but it makes everything else easier to manage.
