Plan sponsors, regardless of company size, often take advantage of outsourcing as much as possible when it comes to their retirement plans. It’s common to assume that once a recordkeeper, administrator, investment advisor or other third party is engaged, there is little need for active oversight from the plan sponsor. Over time, this can contribute to a degree of detachment from plan operations. But even in the absence of third-party involvement, many plan sponsors would be hard-pressed to explain the full scope of their governance responsibilities — a gap that tends to go unnoticed until a key team member departs.
For brokers and advisers, this governance blind spot is worth paying attention to. If your client lost its head of benefits tomorrow, what would the next person walk into? In most cases, not enough. No comprehensive guide outlining the plan’s structure, no directory of key vendors and their roles, no written procedures for ensuring that service providers are performing as expected. There may be no clear documentation of periodic fee benchmarking, benefit committee structures, or audit procedures — just a vacuum of institutional knowledge that the last person responsible for the plan carried in their head.
