PLANSPONSOR - November/December 2024 - 28

INVESTMENTS
second category change constantly, and rapidly, in comparison
with the first category. "
Educating board members on litigation trends is also important,
and Sciangula says a legal adviser from the county attorney's
office serves as a nonvoting board member and attends
all board meetings. The adviser is trained in the same manner
as the voting members as to plan administration and current
industry and litigation trends.
Levinson says, when he conducts plan committee training
at Fidelity, he begins with the fundamentals of what ERISA
requires and what it means to be a fiduciary; he also underscores
the need to document.
" Being able to demonstrate ... that you've made good decisions
and that you're consistent, that you have agendas, you have
regular meetings, is really important so that if you ever find
yourself in a litigation situation, you have the material you need
to successfully defend yourself and make sure, ideally, that this
litigation goes away quickly, " he says.
He updates committee members about anything that legally
or marketwise might affect decisions they make.
" It's not just dumping information on them, but it's showing
them, and sharing this information relative to their decisionmaking
process or what's going on with them at the moment, "
Levinson says. -Remy Samuels
How to Create a 'Committee of Excellence'
T
o run strong retirement plan committees,
plan sponsors should look to organization,
documentation and flexibility as
key strategies to follow, said the " Creating
Committees of Excellence " panel, at
the 2024 PLANSPONSOR National
Conference, this past June in Chicago.
Committees can vary in size or structure,
depending on the organization and
its needs, said Julie Doran Stewart, head
of fiduciary advisory services at Sentinel
Group. Success comes from creating a
process that best meets the plan sponsor's
goals and then sticking to it.
" Some clients I work with ... apply a
committee charter, " which outlines the
roles, responsibilities and commitments,
including of time, Doran Stewart said. All
committees should have an odd number of
voting members to prevent ties, she noted.
She also advised permanent seats for
leaders in human resources and finance.
For external input on the plan, she
recommended bringing in its recordkeeper
to answer questions or discuss new
offerings. But there should always also be
closed-door meetings, where committee
members can openly discuss the plan,
recordkeeper and other providers, she said.
Committee Commitment
Benjamin L. Grosz, a partner in Ivins
Phillips & Barker, said, although plan
28 PLANSPONSOR.COM November - December 2024
sponsors must have a plan fiduciary
and administrator,
they are not
legally
required to have a plan committee.
Rather, having one is a best practice that
can guide the plan in the best direction
for the employer and participants, as well
as help mitigate risk.
" You'd be surprised, if you look at
publicly available Form 5500s, the number
of plans that don't report having any
committee or any named fiduciary besides
the plan sponsor itself, " Grosz observed.
A good committee should have a
detailed documentation process, created
by the sponsor and its adviser if it has one,
Grosz said. This recordkeeping ensures a
good fiduciary process for audits or any litigation
and manages committee turnover.
" It's important that people know historically
what happened two years ago, or why
a certain change in investment or recordkeeper
was made, or whatever it may be. "
Judy Bobilya-Feher, chief financial
officer for Aunt Millie's Bakeries, 2022
PLANSPONSOR Plan Sponsor of the Year
in the Corporate Defined Contribution
>$150mm - $250mm category, said her plan
committee has administrative staff from
payroll and benefits, in part so they can
understand the " ramifications " of plan
decisions in advance of a change- " what
[it] will do to the payroll processes, the
system, the automation, as well as the
benefits side, " she said.
Aunt Millie's plan committees have
additionally, at times, included members
from information technology to address
cybersecurity concerns, she said.
Even a Few Minutes' Training
Bobilya-Feher too cited the importance
of regular communication and fiduciary
training for committee members.
" Oftentimes, there's a sense from
senior leadership that they want to insulate
[employees] against the liability of being a
named committee member and therefore
a fiduciary to the plan, " she said. " Making
sure [the members] understand [their obligation]
is important and comes out through
fiduciary training. "
Such training should be done
formally, at dedicated times, but also be
part of the regular meetings, even if just
for a few minutes at the end, Grosz said.
It can also include training for nonvoting
members, how-to's for one-off projects or
informational sessions on new topics.
" We'll have a special session of, say,
20 minutes on managed accounts-what
the fiduciary considerations [are] and what
you need to know; or maybe you're going
to [collective investment trusts] for the
first time, " he said. " You can have customized
and tailored training along the way. "
-Alex Ortolani
http://www.PLANSPONSOR.COM
PLANSPONSOR - November/December 2024

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