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Investment Committee + IPS = Best Practices

At a TPSU program held at the University of Southern New Hampshire conducted by Adjunct Lecturer David Clayman from Twelve Point Wealth Management, the Chief HR Officer (CHRO) at a local visiting nurses enterprise discusses why her company created an Investment Committee and what they do.

After a series of audits, the plan’s advisor and TPA (third party administrator) recommended that the company create an Investment Committee which is made up of senior management and one member of the Board of Directors. Meeting quarterly, they review investments, their investment policy statement (IPS), plan fees and the glide path for their target date fund. They also discuss how new laws and regulations might affect their plan.

Though Investment Committees and IPSs are not required by law, they are certainly best practices for running a DC plan and it’s hard to think of a reason not to have both which, with the help of a good advisor, is easy to do. The key to a good IPS is to make it flexible and to review it periodically because worse than not having one is not following the one you have.

Though most companies like the NH based nursing company use senior management to be on the Committee, others like a construction company in TN attending a TPSU program at Vanderbilt University also include plan participants. Though they need guidance and training, just like senior managers, the company wanted to get more buy-in from their workers who might trust the plan more if run by peers. There’s a sense of excitement about the plan with these Committee members which bubbles over into the rest of the workforce.

Coming to TPSU was comforting as the CHRO learned that her company and committee were actually doing what they needed to be doing to limit liability, help employees and keep abreast of changes. Hearing from experts and peers is the key to effective education for fiduciaries running a defined contribution plan as is keeping up with latest trends and laws.

Fred Barstein

Fred Barstein

Founder & Editor-in-Chief at 401kTV | TRAU | TPSU
Fred Barstein is the Founder & Editor-in-Chief of 401kTV. Fred is also the Founder and CEO of The Retirement Advisor University (TRAU), a collaboration with UCLA Anderson School of Management Executive Education and The Plan Sponsor University (TPSU).Mr. Barstein was also Founder and Editor-in-Chief of NAPA Net.
Fred Barstein
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