Retirement plan committees for 401(k) and 403(b) plans need to operate in the bestinterest of plan participants, according to Judith Rohr withRetirement Management Services. To that end, how the committee isorganized makes a big difference in the outcomes of planparticipants.

Committees serve an important role in making decisions for planparticipants and their beneficiaries. RMS recommends that eachcommittee member have a defined role on the committee. Organizationis the key to keeping committees running smoothly.

It also is important to remember that at least one named personon the committee and in plan documents must serve a fiduciary function. A plan must have at leastone fiduciary who has control over the plan’s operation. Planfiduciaries include the trustee, investment advisors, allindividuals exercising discretion in the administration of the planand all members of a plan’s administrative committee.

Having a retirement committee enables plan sponsors todemonstrate compliance with fiduciary requirements by documentingall plan fiduciary decisions and ensuring there is a process inplace for making decisions that are in the best interest ofparticipants, RMS found.

Plan sponsors may appoint committee members or even ask forvolunteers, but “it should be stressed to them the important rolethey will play in making decisions for the plan participants andtheir beneficiaries,” Rohr said.

Each committee member should have a specific role, such asreviewing procedures or reviewing plan investment choices. The keyis organization. It also should be assumed that any records kept atcommittee meetings will be used in case of an ERISA litigation.

A chairperson should be appointed to lead meetings and setagendas. Another person should take notes during the meeting.Decide on a meeting schedule, whether monthly or quarterly and havedates and times and meeting sites set so members can planahead.

Committees should be in charge of reviewing plan provisions,including all documents and amendments to plan documents. They alsoshould review the plan’s design and make sure it meets companygoals. Committees should review plan policies and procedures, thecompliance report and nondiscrimination testing for the previousplan year and review their prior year investment choices todetermine if changes are necessary.