Retirement Plan Governance
Constructing an effective and efficient Committee for Canadian Group Retirement Plans is a vital aspect of good governance and fiduciary stewardship. It is important to be proactive and diligent in order to avoid liabilities that may arise in the case of, perceived or real, improper action or negligence. Within the Canadian legal framework, the prudent approach to limit exposure to fiduciary liability can be simply stated as, “do the job right and maintain documented proof of the decision making process.”
Good governance requires a series of processes that support efficient and effective decision-making and plan management. The Committee and the plan administrator maintain the duties of care and loyalty to plan members, plus an obligation to act in an even-handed manner between the competing interests of the corporation and plan members.
Critical to the execution of these responsibilities is the Committee/ plan administrator’s ability to maintain the level of resources and skills to perform all necessary tasks or to delegate them to specialists such as Creative Benefits Alliance.
There are a number of important areas that require consideration for a retirement committee, which include the following Processes, Goals, Objectives and Practices:
- Nominate/Elect Chairperson for the Committee
- Establish voting procedures and guidelines
- Establish clear guidelines and timeframes for initiatives
- Review, monitor and provide recommendations regarding CAP Guidelines Governance
- Provide input and recommendations to management regarding plan governance
- Review policies, processes & practices at least annually
- Establish formal criteria for the selection and review of the administrative carrier
- Establish formal criteria for investment managers, and fund platform selection and reviews
- Review “Statement of Investment Policies & Procedures (SIP&P) document and provide recommendations to management
- Provide recommendations regarding communication and education initiatives for plan members
- Review plan member feedback and surveys