If statistics are any guide, by now a significant number of you have already broken your New Year’s resolutions. However, if you work with employee benefit plans, here are some ideas to keep in mind in the upcoming year – and to perhaps share with your plan sponsor clients.
1. Fiduciary, Know Thyself. It important to know your fiduciaries (or know if you are one). Reviewing plan documents, charters, and delegations, among other possible documents, are key to determining who is an ERISA fiduciary. You should make sure that any individuals who have been designated are still willing and able to serve and, if not, they should be removed. While not as much of an issue for plan sponsors, advisors should also closely review the DOL’s conflict of interest/fiduciary rule to determine if it applies to them.
2. Look Over Your Service Providers’ Shoulders. Even if you think you have outsourced one or more of your plan responsibilities, you’re still required, under ERISA, to monitor those providers to make sure they are doing their jobs properly. Additionally, if you have not done an RFP in a while for a particular service provider, it may be time to do one.
3. Resolve to Improve Your Plan Governance. The specter of litigation can be made considerably less scary by reviewing, and improving your plan governance.
4. Wrap Yourself in the Protective Cloak of Procedurally Prudent Process. Not only is following a procedurally prudent process necessary to satisfy your fiduciary obligations, it is also your best protection from fiduciary breach claims. What does this mean? For each fiduciary decision you should: (1) inquire, (2) analyze, (3) consider alternatives, (4) seek help and advice as appropriate, and (5) document the process, actions and basis for the decision.
5. And Add a Protective Layer of Fiduciary Insurance. After all, ERISA fiduciary liability is personal… and joint! Which means you could be liable for the sins of your fiduciary brothers and sisters.
6. Calendar Reporting and Disclosure Requirements. Sponsoring an ERISA plan can involve a dizzying array of reporting and disclosure obligations. Take the time to sit down and review the obligations for each plan and calendar when they are due. This will prevent them from becoming deadlines that creep up on you unexpectedly. For assistance with retirement plans, consult the Retirement Plan Reporting and Disclosure Guides issued by the IRS and the DOL. Note also that your plan vendor may also publish a reporting calendar that will help you fulfill these obligations.
7. Keep an Eye on Twitter (Yes, Really). Given the President-elect’s propensity to make economic news 140 characters at a time (no account required for that link to work), including tweeting about the ACA, it makes sense to keep an eye on what’s going on there.
8. Or at Least Keep an Eye on D.C. More generally, with Republicans controlling both houses of Congress and the White House, it’s possible that this year and next year could result in some significant changes in the employee benefits landscape. The Republicans are already talking about tax reform, and that will have substantial impacts on employee benefit plans.
9. Keep the Other Eye on the Courts. Particularly on fee litigation. Plaintiff’s lawyers continue to expand not only the plans which they are targeting for challenge, but also the type of fees being challenged. Plans sponsored by educational institutions were targets in 2016.
10. And if you have one eye left, keep it on government enforcement action. One area that is always at the top of the list is timely contribution to the plan of employee deferrals and loan repayments. Remember, the DOL requires that such amounts be paid into the plan “as soon as reasonably practicable.” The 15th day of the following month is a not a safe harbor.
Chris Rylands and Lisa Van Fleet are partners at Bryan Cave, LLP. This article originally appeared in the Bryan Cave benefits blog, and is reprinted with the permission the authors.
