Most plan sponsors have a Swiss cheese approach to plan management.

The more plan reviews we do, the more we have come to understand the number of holes in plan management that exist throughout the marketplace. Poor plan management is sad because it often robs plan participants of the opportunity to secure a comfortable retirement and leaves plan fiduciaries’ personal assets exposed to considerable liability.

I don’t think in most cases this is intentional or even the result of apathy. I find that most plan sponsors want to do the right thing by their employees and, heck, even themselves since they are often plan participants too. They just don’t know what they don’t know. Unfortunately, this is not a good defense in a plan audit. Plan fiduciaries are held to a prudent expert standard and, when lacking the necessary expertise, they are expected to hire someone who does.

So here are the top ten problem areas that I will address in more detail in future blogs:

• Failure to have a solid documented process
• Failure to have signed plan documents and amendments
• Failure to handle participant notice and communications requirements correctly
• Failure to operate the plan in accordance with the plan document
• Excessive, unnecessary, and inappropriate fees
• Lack of proper due diligence regarding fund categories and fund selection
• Lack of understanding of what participants are being provided or told
• Misunderstanding where the real fiduciary risks are and how to mitigate them
• Inappropriate plan provider choices
• Employers not getting the value they should for the money they spend