Managing a retirement plan is a big job, and it’s not without risks. That’s why good management—or governance—of a retirement plan is so critical.
Governance goes beyond fiduciary duties and includes everything involved in the administration and management of the retirement plan. Basically, governance establishes the rules of the road for plan decisions. It’s about making decisions—for all aspects of the plan throughout its life cycle—the right way.
Governance can also help with the issue of accidental fiduciaries—employees who inadvertently overstep the boundaries of their roles. Good governance processes help reduce risk by putting proper processes in place for both fiduciaries and non-fiduciaries.
Once the client is on board with the need for a governance evaluation, start walking them through the process. A retirement plan governance white paper from The Principal, Retirement Plan Governance, What is it and why should you care?, will help.