Spring Clean Your 401(k): Five Fiduciary Tasks To Tackle Now

Spring is a good time for plan sponsors to review the overall health of their company’s retirement plan. Just as individuals review their finances periodically, plan sponsors should regularly evaluate plan operations, investments, and participant engagement to ensure their retirement plan continues to meet fiduciary standards and support employees’ retirement readiness.

Taking time each year to “spring clean” a retirement plan can help identify potential issues early, improve participant outcomes, and demonstrate prudent fiduciary oversight. While every plan is different, several key areas deserve regular attention:

Reviewing plan data, such as participation rates, contribution levels, and loan or hardship withdrawal activity, can help sponsors identify potential areas of concern.

If participation or contribution rates are lower than expected, plan sponsors may want to enhance communication strategies or offer additional financial education resources. Educational workshops, digital planning tools, and targeted messaging can help employees better understand the importance of saving for retirement. In addition, there may be opportunities through plan design changes to improve plan metrics.

Finally, fiduciaries should ensure their oversight activities are well documented. Meeting minutes, investment reviews, fee analyses, and service provider evaluations all help demonstrate that fiduciaries are acting prudently and in the best interests of plan participants. Maintaining clear documentation supports a strong governance process and can help protect fiduciaries if questions about retirement plan oversight arise.

In coordination with the plan’s investment advisor team, plan sponsors should periodically review their plan’s investment lineup to confirm that each investment on the plan menu remains appropriate for participants and continues to meet the criteria outlined in the plan’s Investment Policy Statement.

This review typically includes evaluating fund performance relative to benchmarks, examining expense ratios, and confirming that funds remain consistent with their stated investment objectives.

Fiduciaries must ensure that plan fees are reasonable and competitive. A periodic review of plan fees, including investment management fees, recordkeeping costs, and administrative expenses, can help determine whether the plan’s expenses remain competitive in the marketplace.

Spring can also be a good time to review service provider agreements, fee disclosures, and benchmarking reports. Documenting these reviews is also an important part of demonstrating prudent fiduciary oversight.