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When a Governance Review Reveals Something is Missing

“What should a plan committee include in its governance process?”

The Retirement Learning Center works with plan committees to help assess the effectiveness of their plan governance process. This process, known as a governance review, consists of reviewing various plan related documents to help assess how well the plan committee is satisfying its ERISA obligations. Recently, RLC completed a review for an organization in the Midwest and it was clear- something was missing.

We had requested and received the prior three years of agendas, meeting minutes and handouts, service agreements, the investment policy statement (IPS) and the plan document.

The documentation we reviewed was good. The meeting minutes were clear and well done; the investment review and assessment process was thorough and it appeared the IPS was followed appropriately. A solid array of investment options was maintained for the benefit of the participants.

Our concern was not what we saw but what was absent in meeting minutes and other materials.

The committee’s documentation only addressed investment-related issues and was devoid of any consideration or issues other than the investment process. Pursuant to the plan committee meeting minutes, no non-investment topics were ever discussed. RLC’s view is that  such an omission is problematic.

Good governance goes beyond oversight of the investment options. A good governance process should include ongoing

  • Fiduciary education,
  • Reviews of service agreements and standards,
  • Evaluations of plan documents and amendments,
  • Analyses of annual plan audits,
  • Checks on payroll remissions and
  • Participant notices and communication and
  • Government reporting.

Those are just a few of the key elements that a governance committee should evaluate, document and reflect in the agenda and meeting minutes.

A good governance process extends beyond oversight of the investment menu. We encourage plan officials to ensure their governance process is holistic and covers all aspects of plan operations, communications, and overall plan effectiveness.


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