Don’t Overlook the Need for a Fiduciary Oversight Review
December 15, 2022
Retirement plan fiduciary obligations are much easier to meet when you have expert guidance, especially from consultants who include a fiduciary oversight review (FOR) as a key service. FOR serves as an organized, documented approach to effectively oversee a retirement plan and fulfill fiduciary requirements.
In addition to helping fulfill fiduciary responsibilities under the Employee Retirement Income Security Act of 1974 (ERISA), FOR often reveals opportunities to reduce plan liabilities and improve plan participant outcomes.
How Organizations Benefit From the FOR Process
Reduced retirement plan sponsor liability, through enhancements to the plan governance process by subject matter experts and satisfying U.S. Department of Labor (DOL) and Internal Revenue Service requirements
Improved retirement plan participant outcomes, through a detailed and consistent process for selecting suitable, prudent investments and providing a transparent fee structure and reasonable fees
Increased retirement readiness of plan participants
FOR Process Delivers for Fiduciaries
Each client that works with USI Consulting Group (USICG) is assigned a dedicated investment consultant who provides continual fiduciary support across all aspects of retirement plan management, including the FOR.
The benefits of USICG’s FOR report include:
- Ensuring each retirement plan committee member understands and executes their duties
- Providing a formal fiduciary evaluation of investments, based on USICG’s research team’s quantitative and qualitative due diligence process
- Keeping employers informed of current industry trends and best practices, regulatory and legislative developments, and compliance deadlines
- Enhancing plan participant experience through engagement, plan features and qualified default investment alternative (QDIA) selection
- Sharing expert opinions from USICG’s in-house ERISA legal team, credentialed investment advisors, and actuaries
- Improving fiduciary governance by documenting the dates for each service
- Documenting a prudent process for selecting and monitoring plan investments and service providers, as required by the U.S. Department of Labor (DOL)
- Evaluating plan fees and expenses on a regular basis
- Offering education for fiduciaries and anyone who has oversight of the retirement plan
As co-fiduciaries to your retirement plan, ensuring plan costs are reasonable and competitive is a core part of USICG’s service model. This includes benchmarking fees in all areas of the plan, including asset management, recordkeeping, customer service, administration and participant education.
Case Study: FOR Process Uncovers Governance Issues
USICG’s FOR process proved advantageous for a client whose previous investment advisor did not provide regular investment reviews of the 403(b) plan. USICG performed ongoing due diligence and reporting of investment performance, and measured the key characteristics outlined in the plan’s investment policy statement.1
We made recommendations that added diversification and simplified the investment menu to meet varying levels of sophistication and risk tolerance of plan participants. In addition, to increase plan participation, we developed a comprehensive employee education and communication campaign on diversification and investing.
Our process uncovered significant deficiencies in the plan governance that could have led to litigation and/or consequential penalties levied by the DOL. The FOR provided an opportunity for the client to make critical adjustments to its plan, improve employee participation, and save $7,500 in advisory fees.2
How USI Consulting Group Can Help
USICG’s FOR process offers more than guidance to meet your plan’s fiduciary obligations. It provides an opportunity to reduce plan liabilities and improve plan participant outcomes. If you are interested in learning how your organization can benefit from our FOR process, contact your local USICG representative, visit our Contact Us page, or reach out to us directly at firstname.lastname@example.org.
1 Investment Advice for institutional accounts provided by USI Advisors, Inc. USI Consulting Group is an affiliate of USI Advisors, Inc.
2 Cost reductions to the plan will vary and are dependent upon various factors, including, but not limited to: plan size, total assets held, management fees, administrative costs and services provided.
Investment Advice provided by USI Advisors, Inc. Under certain arrangements, securities offered to the Plan through USI Securities, Inc. Member FINRA/SIPC. 95 Glastonbury Blvd. Suite 102 Glastonbury, CT 06033 860.652.3239 USI Consulting Group is an affiliate company of both USI Advisors, Inc. and USI Securities, Inc.
This information is provided solely for educational purposes and is not to be construed as investment, legal or tax advice. Prior to acting on this information, we recommend that you seek independent advice specific to your situation from a qualified investment/legal/tax professional. | 1022.S1113.0079
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