In the wake of COVID-19, employers are rightfully asking questions about their sponsored retirement plans and fiduciary responsibilities. Stimulus packages and media coverage has paid a lot of attention to individual relief and changes to retirement plans from the employee’s perspective. But what does this mean for your fiduciary responsibility as a plan sponsor? Although each situation is unique depending on your current business needs, there are a couple things you should consider.

Monitor Plan Investments

The first step is to review your plan’s investment policy statement (IPS). As the market continues to be volatile, you should make sure the plan investments are continuing to meet the terms of the IPS and the needs of the plan participants. This includes double checking things like:

  • If the plan’s suite of target date funds as the QDIA (Qualified Default Investment Alternative) to determine the comfort level with their volatility
  • If the plan’s fixed income options are appropriate (and if there are ample options available)
  • If certain funds in the equity options should be consolidated or removed due to lack of understanding by participants

After revisiting the details of your plan, you could potentially see if any investment changes in the line-up design are needed to meet the changing environment and participant needs.

Review Plan Design Specifications

Times like these are a good reminder for plan sponsors to take a look at the specifics of their plan and ensure the plan document allows for adjustments or suspension of any employer contributions if necessary. You should also be asking yourself questions like:

  • Have the appropriate measures been taken to allow for coronavirus-related distributions (CRD) or to address increased loans?
  • Does the plan allow for in-service withdrawal options for aging active employees to take money out of the plan if needed?

These questions are good reminders to keep in mind for your plan participants, the challenges they might be going through right now, and the options that your plan provides participants to alleviate some of those challenges.

Increase Communication with Participants

Clear communication is always important, but it becomes crucial during times of uncertainty that can cause increased anxiety for employees. Now is the time to let plan participants know that you are actively reviewing and/or working with an advisor to consistently monitor the plan investments.

In doing so, you should clearly communicate any plan design changes in a timely manner so they can make any necessary adjustments on their end, given their individual circumstances. In addition, you should also make sure participants understand what education or guidance opportunities, if any, are available to them through either the plan’s record keeper or advisor.

While the steps outlined above are a great place to start, these steps are also only the beginning. As you’re reviewing your plan documents and proactively communicating with plan participants, now might be a good time to connect with your retirement plan consultant or advisor to discuss specific ways COVID-19 could impact your fiduciary responsibility.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Brian Gregov

Brian Gregov

Director, Retirement Plan Consulting

AIF®, QKA Brian leads a highly qualified team and oversees the retirement plan governance and fiduciary responsibilities for his clients, along with their administration, operations and design. He has more than 20 years of broad experience working in retirement solutions, including managing plans for large, multi-hundred-million-dollar corporations as well as small businesses. Brian supports his clients by designing customized retirement plans that are focused on specific goals and needs....Read More