Do 401k or 403b plans have to form a committee to oversee their organization’s retirement plan?
The answer is no but here’s why they should.
- Group decision making will more likely than not result in better outcomes.
- In today’s regulatory minefield and litigious environment, a documented prudent process is the best defense. Having a committee charged with this responsibility means it is more likely to happen.
- The plan will more likely perform better for the employees and the organization when a committee is focused on:
- Operations
- Design
- Investments
But the number one reason to form a retirement committee is that if not, the owner or Board becomes the de facto fiduciary with personal assets at risk. Now that’s a great way to get senior management engaged.
