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During any given year, plan sponsors engage a variety of service providers to perform various services for their retirement plan. It’s easy to allow inertia to take over and to approach these relationships with a mindset of “if it’s not broken, don’t fix it.” While that’s good advice and it’s not reasonable to make a change just for the sake of it, sometimes it helps to take a moment to ensure those you’ve tasked with helping you run an effective retirement plan continue to offer current and relative services.

As a retirement plan sponsor, one of your responsibilities involves making sure every action taken for the plan is recorded and documented. While of course you hope not to receive an official request to provide history and documentation on actions taken, you must prepare for the possibility.

If you offer a retirement plan to your employees, whether you know it or not, you are a retirement plan sponsor and as such, you are required to take certain actions and meet specific responsibilities. As a retirement plan sponsor, there is a tangled web of ongoing responsibilities related to your receipt of annual disclosures and performance of due diligence. Market volatility makes it critical for retirement plan sponsors and covered service providers to develop and maintain investment due diligence procedures and supporting documentation.

Being a retirement plan sponsor comes with great responsibility—and risk.  As a plan sponsor, you have a fiduciary duty to ensure your plan service providers—investment advisors and recordkeepers—are meeting the standards of professional responsibility, as defined by the Employee Retirement Income Security Act (ERISA)—whether or not you know the ins and outs of ERISA or Securities and Exchange (SEC) laws. If you are in an executive or leadership position in your company, the responsibility falls on your shoulders. As such, many plan providers entrust the management of their retirement plan and fiduciary responsibility to an investment advisor. Performing due diligence is a critical and mandatory component of your risk management strategy. As a plan sponsor, you should also implement processes and procedures that ensure you avoid conflicts of interest.

As our nation’s corporate retirement plans gain increasing attention from regulators, it is important for plan sponsors to document the due diligence they perform to monitor the health of their plans. While this due diligence typically takes the form of fee benchmarking and various types of plan reporting, an effective way to evaluate those consultants providing advisory services to retirement plans has proved elusive.

As a sponsor of a corporate retirement plan, you have a fiduciary responsibility to ensure that your retirement plan provides the best possible benefit to your employees. The due diligence your employees are owed ensures that decisions made on their behalf have been vetted and undergone a certain level of scrutiny to arrive at the appropriate action.