Utilizing an objective process is crucial to making prudent decisions. The four steps we utilize to help the plan sponsor fulfill their fiduciary responsibilities are: organize, formalize, implement and monitor.

Organizing is important to discovering where you stand in your current process. It includes understanding the requirements under ERISA, making sure the current plan documents do not conflict with current laws, and making sure plan fiduciaries understand their roles. This step is the foundation to building the rest of the plan.

Formalizing is the phase in which to decide and lay the ground work for how the plan should be run. Developing the investment policy statement, choosing assets classes and monitoring constraints are part of this step.

Implementation is taking what was created in step two and putting it into place to choose specific investments, implement selected safe harbors, etc.. Monitoring is a continual process of not only making sure the chosen investments continue to be appropriate for the plan, but also reviewing the plan documents and Investment policy statements periodically to ensure they are still relevant. It also includes reviewing your plan to make sure it stays competitive in the market place. The Department of Labor suggests the plan should be compared against the competition every three to five years. Most advisors do not understand the importance of putting an objective, proven process in place to help the plan sponsor manage his or her fiduciary responsibilities. Does yours?