Retirement Plan Committee Meetings—What Plan Sponsors Want

Editor’s note: This is Part I of a two-part series. This article originally appeared in the Winter 2024 issue of Plan Consultant magazine. 

As a best practice, we know that plan sponsors should have a retirement plan committee and have regular committee meetings.

Do plan sponsors do this? And if so, what do they really want to talk about in these meetings? 

It used to be “regular” stuff like investments, compliance testing, and maybe some information about new things that they should consider for their plan. But in today’s world, plan sponsors want more…they want to talk about participant outcomes and financial wellness. When we talk about participant outcomes and financial wellness, what does that really mean?

To get started, when the retirement plan committee is being formed, it should be deciding who should be on the committee, how often they should meet, and the essential items that should be on the agenda. 

I do believe that most financial advisors who are committed to the retirement plan space do schedule regular meetings with their plan sponsors. And I also think everyone knows that the committee should be named in the plan document, that they should have a charter, and that the committee members should undergo training to serve on the committee so that they are clear on their responsibilities.

But I also think that the plan sponsor landscape has changed, and that advisors and other service providers really need to talk with the plan sponsors about what they want to cover in the meetings. Clients are now looking for more than just investment reviews, investment policies, 404(c) guidelines, and an understanding of the investment expenses and fees. Now what they want is to drive results for participant outcomes and financial wellness.

To research this more in-depth, I talked with Cynthia Ventura, the Director of Engagement Consulting for Fidelity Investments. The largest part of Cyndi’s day-to-day responsibilities is meeting with plan sponsors about their retirement plans. Here are some of the highlights of what plan sponsors currently are asking her to cover in those meetings. 

• Participant Education. The plan sponsor wants to understand participant outcomes and how they can help employees get to retirement. Plan sponsors want education that will matter to the employees and is meaningful and relevant today. In addition, they now want targeted meetings and no longer just want regular enrollment meetings. They want the content in the meetings to relate to what is going to matter the most to the majority of the population.
• Financial Wellness. The provider and advisor need to work together to provide information on financial wellness. The provider’s information should complement the information that the advisor has available for participants. Covering topics like budgeting and life events (helping employees when they are going through something that is challenging like a new baby, divorce, etc).

 

Availability of workshops and podcasts can help employees to relieve stress. Employees often don’t know where to turn when they are in a stressful situation, and according to Cyndi, employees have no idea that these resources are available. Some other areas that can help employees include credit card debt, savings, and student loan debt and direction, as well as education that is directly related. It is a request for meaningful and relevant information to continually be available. 

Plan sponsors are considering financial wellness to help with retention. Creating awareness of the financial wellness offering is the key for success. 

 

• Communication. This comes in several forms for plan sponsors as well as participants. It will include information on the online tools that are available along with data (third party administrators (TPAs) can help with this) that complements the data the recordkeeper already has, in order to achieve a better participant experience and ultimately create a campaign to help employees on various topics. Personal campaigns that have a frequent message based on age or behaviors will be critical. So having a partner that collects this type of data will help with developing these campaigns.
• Communication Frequency. Set up an annual calendar with the plan sponsor during committee meetings. That calendar should be more than just due dates of plan-related items and be complemented with communication campaigns. At a minimum, there should be a quarterly touchpoint for participants, with monthly communications that trigger items happening with them (such as retirement). Having the correct data and the ability for the TPA, recordkeeper, and plan sponsor to work together will make this a better process. 
• TPA Input. The recordkeepers and advisors should also consult with the TPA and invite them to the meeting. Before joining committee meetings, consider a pre-call planning session to discuss the service models of the TPA, advisor, and recordkeeper. Really try to get to know each other, become a team, and identify how the services work together.

 

The relationship between the TPA and the plan sponsor is valuable, and is typically a local presence (and with zoom being prevalent, even if the TPA is not local they can still easily participate). The areas with which the TPA can typically help with are participation information and plan specifications, especially safe harbor and employer non-elective contributions. The TPA also typically knows more about what is going on and how the recordkeeper can help the participants. In addition, if the TPA is functioning as a 3(16), then the involvement is even more in-depth with that plan sponsor.

Other Plan Opportunities. There are often other opportunities that can be discussed with plan sponsors during committee meetings—such as health savings accounts, student loan debt, and benchmarking. Plan sponsors want to make sure that what they are offering to their employees is competitive in the market. 

 

• Challenges. Plan sponsors are often short on time, so we need to help them handle this and make it easy. Working together will help them to make it all happen. Having a plan with a great team and education strategy, along with all the data and documents put together, can make for a great relationship in addition to being a great “value add.” Plan sponsors also are not able to keep up on changes that are coming for their retirement plan. We are a valuable source of that information and should always have that on an agenda. Setting a time for each speaker / topic can help the meeting stay on track. 
• Impact. The final piece that plan sponsors want to know is whether they are making an impact on the participants. Having a great partnership with a recordkeeper and TPA allows the plan sponsor to leverage the information that is available on the recordkeeper’s system and to really use it for future participant campaigns. Are the items that we are sending and using for education helping participants and really making an impact?

 

Thank you to Cyndi Ventura for sharing her insights with me as I broke down the important pieces for plan sponsors and plan participants. The next issue will talk more in dept about how TPAs can help more with this process and be a valuable piece of the puzzle.

NEXT: Retirement Plan Committee Meetings–Part 2: How TPAs can help the Process

Theresa Conti, QKA, APR, ERPA, is President of Sunwest Pensions.