PLANADVISER - September/October 2020 - 14

cover story
it also makes sense to have a fourth, and possibly a fifth,
member who specializes in an area such as payroll or
benefits, he adds.
" But we suggest against really large committees, because
it tends to reduce accountability, " he says. " Either you have
something like a 13-person committee that is really being
run by a core group of three to five people anyway, or it
becomes difficult to get a committee consensus due to people
not attending meetings or not actually being interested in the
committee's work. "
Fiduciary Investment Advisors regularly does fiduciary
training for committees to explain the key fiduciary responsibilities
they have. " The DOL [Department of Labor] is now
asking sponsors about their committee's fiduciary education,
so, for protection, it's important to do it annually, " Wetzel
says. " But beyond that, it's also important for new committee
members to get up to speed and for remaining committee
members to get a refresher on their responsibilities. "
Making Virtual Meetings Worthwhile
As the pandemic continues, virtual committee meetings are
here to stay, Wetzel predicts. " I don't envision that companies
are going to be bringing in outsiders to their offices anytime
soon, " he says. Even once the pandemic subsides, " My expectation
for the future is that, if committees had four in-person
meetings a year before, many will go to two in-person and
two virtual, or even one in-person and three virtual, " he says.
Of course, virtual meetings present unique potential
challenges. The advisers discussed how to deal with three of
these (see, also, " Cures for Virtual Meeting Fatigue, " page 30):
* Help time-pressured members. Most of Winegrad's
client committee members have many other responsibilities
besides the retirement plan, so they may be focused on more
immediate concerns such as layoffs or how to bring back staff.
Asked how he would encourage overwhelmed committee
members to keep prioritizing their fiduciary responsibilities,
he says, " Much of it is educating them about how immense
the fiduciary responsibility is. The past few years have seen
many participant lawsuits, and that gives an adviser more
firepower to help him convey how serious this is. "
PlanPILOT in Chicago has stepped forward in a number
Eye on Cybersecurity
ADVISERS CAN HELP plan sponsor committee members develop a prudent cybersecurity
process to protect plan participants and mitigate their own fiduciary risk.
Prior to the pandemic, cybersecurity breaches were increasing. With millions
of people doing business in a virtual environment, there is even more need for
caution. Here are three ways to keep a plan's cybersecurity processes strong:
of ways recently to help committees perform smaller tasks
not necessarily in their service agreement but that help timepressed
committee members, says Managing Director Mark
Olsen. This includes sometimes taking the lead on scheduling
committee meetings and taking the first crack at putting
together the agenda or the meeting
minutes. " We also are very upfront in
saying, 'We know your time is precious
now, so let's focus in the committee
meetings on what's most pressing-such
as investment reviews and regulatory
changes-and reprioritize other things
for another date,' " he says.
* Proactively educate new fiduciaries. It
1) Have participants register their online accounts. " In our education meetings,
we always make sure that all participants have registered their account online, "
says Edward Chairvolotti of Chairvolotti Financial. " So if something [fraudulent]
is going on in their account, they will know it. "
2) Tighten the employer's internal procedures. " For loans and withdrawals,
the sponsor needs to set up a process so that approvals are not automatic, "
Chairvolotti says. " Set it up so that someone on the employer's staff has to 'check
the box' to approve a loan or withdrawal. Some of our clients have two staff
people who have to approve it. "
3) Review the recordkeeper's processes. Since even before the COVID-19
crisis, finding ways to monitor a recordkeeper's cybersecurity capabilities " has
been challenging, and that hasn't gone away, " says Michael Montgomery of
Montgomery Retirement Plan Advisors. " Most advisers aren't experts in cybersecurity
ourselves. So we look for a recordkeeper to get an outside, third-party
certification to confirm the adherence of its process to industrywide standards. "
PlanPILOT sent out a request-for-information (RFI) " refresh " to recordkeepers
recently, mainly to keep its own records as to their cybersecurity procedures up
to date. " We're asking recordkeepers, 'What are you seeing that hackers are
doing differently now? And what are you doing differently in your cybersecurity
procedures as a result?' " says Mark Olsen, of the firm. -JW
14 | planadviser.com September-October 2020
is especially important for people new to
a committee, and to the fiduciary role, to
get training and ongoing mentoring, even
if that can only be done virtually now,
Winegrad says. " It's really incumbent on
the plan's adviser and on more-senior
members of the committee to help these
people understand their role, " he says.
He avoids legal or technical jargon when
explaining to them what that is and
focuses on helping them understand the
weightiness of their responsibility.
" I tell them, 'You are now in a position
that you're making decisions about
money that isn't yours,' " Winegrad
continues. " It's important for them to
understand that fiduciary liability is a
personal liability, and if they don't meet
their responsibilities and then get sued by
participants, it can seriously affect them
and their family. I also tell them that if
they're always making decisions that are
in the best interests of the plan's participants,
they're generally going to be fine. "
To help them feel acclimated in their
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PLANADVISER - September/October 2020

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