Items Your Annual Retirement Plan Review May Be Missing

February 20th, 2018
by Jonathan Leidy

RPM Q1 2018_Pulse Image_Blog Article 3_Items Your Annual Retirement Plan Review May Be Missing

As a plan sponsor, you are probably no stranger to the annual retirement plan review. And believe it or not, it is that time of year again! Although you may meet quarterly or semi-annually with your advisor, a yearly plan assessment is an opportunity to evaluate the entire health of your plan.

Many times, the focus of an annual review has to do with investments and fund line-ups; and while this is important and should absolutely be addressed, your review should go further.

Your review should assess five major areas: plan design, retirement readiness, fiduciary oversight, service provider due diligence, and investment due diligence.


When discussing plan design, it is important to evaluate key demographics like participation rates, deferral rates and diversification.

If your plan suffers from low participation and deferral rates, as well as poor participant-driven investment decisions, there are potential answers[i].

20180217 Retirement Plan Design Dashboard

Assessing your company’s annual rates could shine light on auto-features and other enhancements that may improve your plan design. Implementing options such as auto-enrollment, auto-escalation, and target date re-enrollment may combat the common obstacles mentioned above.


At the end of the day, the purpose of your plan is to prepare your employees for their ultimate goal: retirement. The design of your plan can help your participants prepare via defaults and automatic features, but can you do more to motivate and educate them?

  • Should you consider a Target Date Fund Re-enrollment, i.e. mapping all of your existing participants into the Target Date Fund that most closely corresponds to their individual retirement date, in order to ensure that your people are taking “age-appropriate” amounts of risk?
  • Do you need to add an education program that delivers targeted content to different demographics within your employee base that will help them address the financial issues they are most likely to be facing?
  • Have you considered adding a cutting-edge Financial Wellness offering in order to alleviate financial stress and assist with their current and longer-term goal management?


Your annual review is a great opportunity to pop open your “fiduciary vault” to organize, review and update your various plan documents. The documents may include:

  • Summary Plan Description (SPD)
  • Investment Policy Statement (IPS)
  • Education Policy Statement (EPS)
  • Fee Policy Statement (FPS)
  • Investment Committee Charter
  • Plan Documents and Annual Filings
  • Service Agreements


While assessing the fees and services that each service provider offers, don’t forget to ask about new services and technologies. Tech develops quickly these days and your service providers may have updated websites, mobile apps and reporting software. Ask what is new and if it has an impact on plan features or fees.

Another question worth considering is how the DOL Fiduciary Rule may affect your vendor relationships and if there are any conflicts of interest they need to disclose. Although the date for the rule’s implementation has been extended to mid-2019, as a fiduciary, these are questions you should be asking now.


One of the costliest fiduciary missteps you can make is having an Investment Policy Statement (IPS) and not following it. It was listed previously in the fiduciary oversight section, but is well worth another mention.

A, B, C, D, I, R, K, Y… Listing the options for investment share classes may look like the letters you select during a Wheel of Fortune bonus round. But, they do matter and should be understood and discussed during your annual meeting.


It is just as important to look ahead during your annual review as it is to look back on the previous year. Use this opportunity to set goals for the plan and put them on a timeline. Consider adding them to your quarterly or semi-annually meeting agendas to help you stay on track.

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements and you should consult your attorney or tax advisor for guidance on your specific situation.

[i] Source: “2017 Defined Contribution Trends – 10th Anniversary Edition” Callan Associates