iThe COVID-19 global pandemic has created a multitude of business and workforce challenges for employers. In addition to addressing organizational issues, employers that sponsor employee benefit plans and plan fiduciaries must continue to manage and administer the benefit plans as well as address plan participant inquiries during these unprecedented and uncertain times.
One area where plan fiduciaries are seeking guidance concerns oversight of defined contribution plan investment options and any additional actions that they can take now with respect to monitoring such investments and providing communications to participants. In light of these concerns, plan sponsors and fiduciaries may wish to consider taking the following actions:
1. If a meeting is not already scheduled in the near future, the plan fiduciaries should call a meeting with the plan’s investment advisors and service providers to discuss status of the retirement plan.
2. In the meeting, the plan fiduciaries can:
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ask whether the investment advisor has any recommended changes to the plan’s investment lineup, including the addition of any new funds or vehicles that may provide additional diversification capability;
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review any Watch list and determine if action should be taken as to any investments on the list;
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determine a schedule for follow-up and investment monitoring discussions;
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in cases where the fiduciaries have retained an investment manager to make discretionary decisions for the plan, discuss the decisions that are being made as part of efforts to monitor the investment manager; and
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document in meeting minutes actions taken or whether there were no recommended changes.
3. Consider creating a communications plan to enhance participants’ understanding of the plan and investments, as well as allay fears. For example:
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discuss with plan recordkeepers, consultants and other service providers whether they have any participant investment educational materials, or handouts in light of the pandemic, that the provider can distribute to participants via email or through the plan website, or that the plan administrator can distribute along with other benefits information or separately; and
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remind plan participants where they can locate information regarding the retirement plan, educational materials, and any plan services, such as call centers that may be able to answer participants’ questions.
4. Ensure plan documents (including summary plan descriptions) are organized in a fashion that they can be easily provided to meet any participant document requests.
5. Maintain regular contact with each other and determine ways to reach each other, as well as investment advisors and service providers, from remote locations.
Prudence and diligence is always a responsibility, and will go a long way in times of crisis.
