Step Four – Due Diligence Review
Selecting providers & monitoring your expenses.

The Department of Labor makes it very clear that a plan fiduciary must conduct a thorough and diligent investigation and a rigorous analysis of relevant information when selecting and reviewing plan providers and investment options.

“Custodial selection is a very important fiduciary function. Most fiduciaries abdicate the decision to a vendor, advisor, or money manager. Yet, as with other prudent practices, there are a number of important decisions that need to be managed.”

“The fiduciary must establish procedures for controlling and accounting for investment expenses in order to fulfill the obligation to manage investment decisions with the requisite level of care, skill, and prudence; and to fulfill the specific obligation of the fiduciary to pay only reasonable and necessary expenses.”

Prudent Investment Practices Handbook
Fiduciary360

As a retirement plan sponsor and fiduciary, you’re responsible for selecting and monitoring providers for your company’s plan. You need to have either a single provider or a combination of providers that offer:

The Solution
Most companies do not have a system in place to compare their existing plan against what is available in the market place. Companies reviewing proposals for a new or takeover plan have a difficult time comparing proposals on a level playing field because each provider has a different format for presenting the information. To help with this step, The 401k Service Solution™ provides a method in Course Four – The Due Diligence Review. This course helps plan sponsors understand what leads plan expenses, how to select a service provider based on the needs of the plan, and provides plans with a fully documented plan feature and expense comparison including a checklist to ensure the expenses of the plan are monitored going forward.

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