In the first blog of our series on what you should include in your fiduciary file, we discussed the legal plan documents you should include in your file. Today, we focus on the second category of materials: contracts and disclosures.
Plan sponsors and fiduciaries often hire a variety of service providers to assist in the administration and operations of the plan. Retaining documentation related to these service providers and their fees can assist with robust fiduciary oversight.
Those can include:
- Third-Party Administrator
- Investment Consultant
- Investment Managers
Service agreements and amendments which are fully signed and dated should be retained from all service providers to the plan.
408(b)(2) disclosures are required from covered service providers. A service provider is considered covered if it expects to receive at least $1,000 from the plan in annual compensation. A 408(b)(2) fee disclosure includes information on the services rendered, fiduciary status, and compensation. A new disclosure is required if the service provider updates any of its services, fees, or fiduciary status.
Trust agreements and other contracts may be required by certain investment products. These tend to be general account products, guaranteed interest products, insurance company accounts, annuities, or certified investment trusts. Be sure to retain copies of all agreements and fee disclosures from investment managers as needed.
Trust Documents, Journals, and Ledgers: Plan level account statements (including bank and trust statements), appraisals, and other evidence to support all assets/investments are stored. This would include annual plan financial statements, cash flow statements evidencing contributions, and withdrawals. Essentially any document evidencing activity within the plan of a financial nature. including actuarial statements.
Requests for Proposals (RFPs) and other documentation of the initial selection of providers should be retained. This may include a full RFP, proposals by various providers, analysis of proposals, and documentation of the analysis and decision through memos, summaries, or minutes.
Our next blog in this series will focus on the third category of materials for your fiduciary folder, Fiduciary Committee Governance. For a short guide on all five categories, read download our "Fiduciary File: What Is It and What Do You Keep In It?" resource.
Multnomah Group is a registered investment adviser, registered with the Securities and Exchange Commission. Any information contained herein or on Multnomah Group’s website is provided for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Multnomah Group does not provide legal or tax advice.