PLANADVISER - March/April 2020 - 34
micro scope
Small-Plan Governance
Advisers can help with the functions of a committee-even a three-member one
T
he Employee Retirement Income Security Act (ERISA)
does not require a plan to have a committee, only a
named fiduciary and plan administrator, says Joshua
Itzoe, partner and managing director in the institutional
client group at Greenspring Advisors in Towson, Maryland.
Still, having a committee formally oversee one's plan and
adhere to guidelines such as an investment policy statement
(IPS) and committee charter is a best practice. " My
philosophy is, every great plan starts with a highly engaged
committee, " Itzoe says.
Advisers working with small companies on their retirement
plan should be prepared to educate the sponsor about
the need for, and formation of, a retirement plan committee
and what its functions should be, industry experts say.
While 72% of plans with $50 million to $100 million in
assets and 81% with over $1 billion in assets have an investment
committee, only 46% of plans with $5 million to
$10 million and 26% of plans with less than $1 million have
a committee, according to the 2019 PLANSPONSOR Defined
Contribution (DC) Survey.
" I'm not sure that running an effective committee is
even a major concern for small plans because most small
companies don't know that
the way to properly run a
plan starts with forming a committee, " Itzoe says. " And
once they do learn about the importance of forming a
committee, they're worried about the administrative overhead
it would take to run it. "
However, advisers can help such plans get started with
proper plan governance-sometimes that could be the
very reason an adviser gets hired, sources say.
Another good foundational rule would be that, while
large companies might have separate committees such
as an administrative committee and an investment
committee, small companies just need to start with one
committee that combines both functions, Itzoe says.
Of his small-plan clients, Bruce Lanser, senior retirement
plan consultant with UBS Retirement Plan Consulting
Group, in Milwaukee, says, " We let them know that effectively
running a plan is not just about investment results but
truly trying to improve the outcomes for their employees.
We find they are very receptive to this advice because they
want to do right by their participants. "
34 | planadviser.com March-April 2020
Art by Eric Hanson
http://www.planadviser.com
PLANADVISER - March/April 2020
Table of Contents for the Digital Edition of PLANADVISER - March/April 2020
Pooled Strength
Invested in Technology
Keeping Up With The Workplace
The Risks of DC Investing
Let Me Introduce Myself
Small-Plan Governance
Hazard Prevention
New Obligation to the SEC
On Small Plans and Large
PLANADVISER - March/April 2020 - Cover1
PLANADVISER - March/April 2020 - Cover2
PLANADVISER - March/April 2020 - 1
PLANADVISER - March/April 2020 - 2
PLANADVISER - March/April 2020 - 3
PLANADVISER - March/April 2020 - 4
PLANADVISER - March/April 2020 - 5
PLANADVISER - March/April 2020 - 6
PLANADVISER - March/April 2020 - 7
PLANADVISER - March/April 2020 - 8
PLANADVISER - March/April 2020 - 9
PLANADVISER - March/April 2020 - 10
PLANADVISER - March/April 2020 - 11
PLANADVISER - March/April 2020 - 12
PLANADVISER - March/April 2020 - 13
PLANADVISER - March/April 2020 - Pooled Strength
PLANADVISER - March/April 2020 - 15
PLANADVISER - March/April 2020 - 16
PLANADVISER - March/April 2020 - 17
PLANADVISER - March/April 2020 - 18
PLANADVISER - March/April 2020 - 19
PLANADVISER - March/April 2020 - Invested in Technology
PLANADVISER - March/April 2020 - 21
PLANADVISER - March/April 2020 - 22
PLANADVISER - March/April 2020 - 23
PLANADVISER - March/April 2020 - Keeping Up With The Workplace
PLANADVISER - March/April 2020 - 25
PLANADVISER - March/April 2020 - 26
PLANADVISER - March/April 2020 - 27
PLANADVISER - March/April 2020 - The Risks of DC Investing
PLANADVISER - March/April 2020 - 29
PLANADVISER - March/April 2020 - Let Me Introduce Myself
PLANADVISER - March/April 2020 - 31
PLANADVISER - March/April 2020 - 32
PLANADVISER - March/April 2020 - 33
PLANADVISER - March/April 2020 - Small-Plan Governance
PLANADVISER - March/April 2020 - 35
PLANADVISER - March/April 2020 - Hazard Prevention
PLANADVISER - March/April 2020 - 37
PLANADVISER - March/April 2020 - New Obligation to the SEC
PLANADVISER - March/April 2020 - On Small Plans and Large
PLANADVISER - March/April 2020 - 40
PLANADVISER - March/April 2020 - Cover3
PLANADVISER - March/April 2020 - Cover4
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