PLANADVISER - January/February 2021 - 35

mark them; 4% did not calculate fees but plan to in the next
six months; and 29% may calculate fees.
Another best practice is to regularly review investment
options. Many retirement plan advisers and ERISA
counsel recommend that sponsors review investments at
least quarterly. According to responses, only 43% of plan
sponsors formally review investments quarterly; 13% do
so semi-annually, and 31% annually. If there is a problem
with an investment, it might go unnoticed if the committee
performs only annual reviews.
Jim Scheinberg, managing partner, founder and chief
investment officer (CIO) at North Pier Search Consulting in
Marina del Rey, California, says many of the new terms and
plan features from the Coronavirus Aid, Relief and Economic
Security (CARES) Act had a big effect on employers and their
participants. " Some employers may contemplate repricing
exercises or evaluate whether the plan is priced appropriately,
and some advisers may even initiate a cost analysis
for clients concerned about opaque investments, " he says. " A
change in demographics may be meaningful for plan sponsors
with asset-based pricing; any changes in plan assets
could have a meaningful impact if the market were to head
down again, especially if they're mispriced. "
Another key best practice that advisers generally bring
to retirement plans is the use of a written investment policy
statement. Thom Shumosic, owner of MidAtlantic Retirement
Planning Specialists in Wilmington, Delaware, says
the IPS is a good way for advisers to " keep score " on the
retirement plans they serve and likens it to a report card.
A properly written IPS outlines the client's actual investment
monitoring process and, if followed, is vitally important
to demonstrate that plan fiduciaries have, and follow,
an established strategy for evaluating the plan investments'
value. Sixty-nine percent of respondents have an IPS while
13% do not and 17% are unsure. Sponsors that have an IPS
should ensure they are in compliance by frequently evaluating
the document and keeping it up to date with regulatory
and legislative changes.
While there is no fiduciary training requirement under
ERISA, during its investigations the DOL has begun asking
whether and when plan committee members received
training. If they did not, there is no penalty or violation.
However, says Summer Conley, a partner in Faegre Drinker
Biddle & Reath LLP, in Los Angeles, " We expect that the DOL
may look closer at how the committee operates in order to
determine whether a fiduciary breach has occurred. Further,
plan fiduciaries are often required to receive fiduciary
training pursuant to litigation settlements and DOL enforcement
actions. " Survey data indicate that just 44% of sponsors
recently received fiduciary training. -Judy Faust Hartnett
Sponsor uses particular measures to assess its DC plan's success
Participation rates
Deferral rates
Participants saving to match
Average account balance
External / Competitive benchmarking of plan design
Participants who increased deferral rates in the past year
Employee satisfaction survey
Participants using advice tools
Participants with " appropriate asset allocations "
Participants meeting projected monthly retirement income goals
Participants meeting retirement income replacement ratio goals
Participants accessing their account online in the past year
Uses no formal plan success measures
Participants who rebalanced their account in the past year
81.9%
66.0%
41.5%
37.9%
34.8%
24.2%
24.1%
22.1%
19.7%
19.5%
17.1%
15.5%
11.4%
5.8%
planadviser.com January-February 2021 | 35
http://www.planadviser.com
PLANADVISER - January/February 2021

Table of Contents for the Digital Edition of PLANADVISER - January/February 2021
