Please note: This is an AI generated transcription – there may be slight
grammatical errors, spelling errors and/or misinterpretation of words.

So, today we’re going to provide an overview of governance. What is it? Why is
it important? That might be a refresher for you, but it’s really foundational to
what we’re going to discuss. We’ll talk about what a good planned governance
review might look like. And what should plan fiduciaries know about their
plan?

And then we’ll leave you with some key takeaways. I’m really excited about our
speakers today. We have a great group for you. We have Abigail Russell. She’s
joining us from Raleigh, North Carolina, CAPTRUST headquarters. She’s been
with CAPTRUST for 17 years and in the industry for over 25 years. And
Abigail’s a retirement focused plan advisor.

She has significant experience consulting in the defined contribution space,
including 401Ks and 403Bs, defined benefit plans, non qualified retirement, and
cash balance plans. Her [00:01:00] sponsor clients are predominantly corporate
plans. across multiple industries and various participant demographics, but her
expertise lies with law firms and biotechs.

So, Abigail, thanks for being with us today. Tim Irvin is also an advisor at
CAPTRUST. He’s focused in the retirement plan space as well and is based in
New York City. And I’m sorry that you can’t see out his window for his
fabulous view of New York City. Um, he’s been with CAPTRUST since 2021,
but has over 10 years of experience in the industry consulting with plan sponsor
clients.

And Tim’s client base is also a great mix, but his concentration is with larger
plans, our large market tax exempt space, which gives him a good combination
of ERISA and non ERISA plan types and will lend really well to this
conversation. So that those of you joining us thinking, well, what [00:02:00]
happens if I’m not, if I don’t have to, um, our plan’s not subject to ERISA
regulations, should I still do some of this stuff?

So we’ll be able to speak well to that. And then finally, John Shambari is a
partner with Kutak Rock and is based in Omaha, Nebraska. And thankfully is
joining us by audio today. John, so I feel like we’re covering a good portion of
the country here. We’ve got New York City, Raleigh, North Carolina. I’m in
Kansas City and John’s out of Omaha.

We just needed somebody more West, further West. John leads his firm’s
National Employee Benefit and Executive Compensation Practice. His focus is
primarily on minimizing his clients legal risk, of course, but while ensuring that
their benefit and comp programs align with whatever their goals are. He works
with private, public, and governmental employers on both Qualified and non
qualified plans.

So, again, to that point of we’ll be able to really give you some perspective
across all of the different slices of your retirement plan. So, I’m really excited
again to have all three of these share their experience. Lots of years of
knowledge and working with plan sponsors like all of you joining us today.

I think you’ll appreciate their perspective and the best practices that they’re
going to share with you. from the work that they do with their respective clients.
So thanks to all three of you for being with us today. And John, I’m, I’ve, I know
you’ve had some technical challenges here with our, uh, system, but I’m going
to start with you as the attorney in the group.

I think to create the foundation for today’s discussion, we really need to
understand What plan governance is and either inform or remind our listeners
why it’s important and why we’re spending A whole webinar focused on plan
governance. So do you mind starting us out by talking through those [00:04:00]
two items?

Don, thank you, and I apologize everybody for my technical, uh inefficiencies
here. Um, So why is plan governance important? Why do we care about? Um,
whether we have a good process in place when it comes to managing our benefit
plans, primarily focusing here today on our retirement plans. Well, there’s two
primary reasons.

There’s the, there’s the one reason that, that should apply in all cases. And
really, if we all are great people, which we are, we should follow the first
reason. We don’t need a second reason. So the first reason is why should we
care about plan governance, well, because it’s the right thing to do for your
employees.

If you have a good fiduciary process involved in managing your retirement
plan, that’s going to lead to better decisions. For your employee participants
[00:05:00] and and and we all want that that you know, and again in a in a
perfect world That’s the only reason we need um, if we can do right by our
employees in the in the retirement plan by having a good process in place to
make the Best possible decisions we can to benefit our employees.

Well, we should all be doing that Um, I even though i’m in Omaha, Nebraska
where everybody’s incredibly nice Um, I don’t always See that side of some,
some folks. And sometimes businesses need to make decisions that aren’t
necessarily just what’s best for their employees. They might need to make
business decisions that are best for the business or best for the shareholders or
maybe best for others.

And sometimes those. Decisions can conflict with what might be best for the
employees. So if there are any employers out there that maybe need further
motivation or another [00:06:00] reason why it’s important to have a good
Governance process and, and just doing right by your employees isn’t quite
enough to get, get you over that hurdle.

Um, I would ask you to answer one question and that is, um, if you are one of
those folks that are responsible for overseeing your retirement plan, um, that
one question is how, how much do you like your house, your car, your family,
And if you’re in your sailboat, let’s just say. And I ask that obviously a little
facetiously, but the reason I say it like that, and I say it like that to all of my
clients and fiduciaries all across the country, is ERISA, which is the federal law
that governs what we’re talking about here and governs retirement plans, um, is
one of the only laws that we have in the country that impose personal [00:07:00]
liability on employees of a company for doing their job.

If you are an employee of a business and you happen to be in charge of your
retirement plan or perhaps you’re on a committee overseeing the retirement
plan, And, um, you do a bad job. Not, not, you’re not a bad person, but, but you
don’t maybe have a good governance process. So you didn’t maybe make a good
fiduciary decision.

The law says that anybody harmed by that, by that poor decision, can bring a
lawsuit against you personally and your personal assets. So every fiduciary
decision you make, I want you thinking about Your house, your car, your
sailboat. That usually is a good enough reason to get people to think, uh, long
and hard about governance, um, because most people don’t want to be subject to
personal liability.

That’s not the gig you signed up for when you went to work for your company is
certainly to have your personal assets on the line when you are. So, two reasons
why governance is important. Number one, it’s the right thing for your
employees. Number two, it, um, uh, it is important if you care about your
personal assets, including your house, your car, and your sailboat.

So, let me also then just, just mention two other. Reasons why a good
governance process, kind of the crossing the T’s and dotting your I’s, is
important. Um, you may tell me that, hey John, I’m always doing the right thing
for my employees, and I don’t really care if my house, my car, my sailboat’s at
risk, I don’t like them anyways, so why do I care about governance anymore
because I’m always doing the right thing.

And I would say, first of all, you’re a wonderful human being because you’re
always doing the right thing, um, which is great, but there’s, there are still two
reasons why governance, and here I’m talking about the crossing of the T’s and
dotting your I’s, is important. Number one, I want you to get credit for being
that wonderful human being that always does the right thing for your
employees.

The best way I can ensure that you are getting credit is if you are following a
good governance process. And we’re going to spend the rest of the webinar
talking about what that might look like. But having a good governance process,
documents, And records for all of history what a great human being you are
when it comes to making fiduciary decisions.

That’s going to make it very easy for me to show that, that you’re a great human
being, and you’ll get credit for all those good things [00:10:00] you’re already
doing. So lots of times when I step in with a new client, they already and they’re
already doing really good things. But what they might not be great at is that
process, that governance process where they’re getting credit for all those good
things.

The second thing that’s important is I want the decision makers to be the ones
On the hook, so to speak, for these decisions, and I don’t want it to be somebody
else. For example, most retirement plans will will say that the Board of directors
of the company is the named fiduciary. They are ultimately in charge of the
retirement plan.

That’s pretty common. And without a great governance structure in place, you
might have somebody in HR, a couple people in HR, that actually make the day
to day decisions. They’re the ones that are picking investments, hiring advisors,
all of that stuff. If there’s a lawsuit, because maybe one of [00:11:00] those
decisions wasn’t a great decision, that lawsuit is going to name the board of
directors.

And the board of directors, as the named fiduciary, is They’re going to be on the
hook, and that means when the plaintiff’s lawyers show up, and they bring this
lawsuit, they’re going to take the deposition of all the board members, and
they’re going to say, tell me what you were thinking when you made this
decision.

And that board of director member is going to say, I have no idea what you’re
talking about. And that’s not a great answer. When that director is a fiduciary.
So having a good governance process, not only gets the right people credit for
all the good things they’re doing, but it also gets the wrong people out of the
conversation, the board of directors should not be the fiduciaries if they are not
the ones actually doing all of the things that it takes to run a plan.

So I’m going to pause there and Tim, Abigail, anything you’d like to, to add, uh,
to that portion. Sure, I can jump in. And [00:12:00] John, I’m in New York City
and I promise the people here are also nice, not just in Omaha. But John, I think
you made a great point. We don’t want to use the threat of litigation as the
primary motivator for implementing a sound documented fiduciary process.

But I’m wondering if you can speak a little bit to The inconsistencies in the
outcomes when it comes to litigation, I think thematically in a lot of these
lawsuits, we see similar themes repeated over and over again. But the reality is,
I think the outcomes are just so inconsistent. Do you think that’s going to
continue to be the case where we get any consistency?

I mean, we’ve seen dismissals, jury trials, and really large settlements. Is that
what we should be expecting moving forward? Tim, that’s a great question. And
I’ll answer that by saying, yes, I expect a lot of inconsistency over the next
couple of years. And the reason, there’s a couple reasons why, but probably the
biggest [00:13:00] reason is, This, this type of fiduciary litigation where, where,
and this is almost always class action litigation.

You might, you know, any, any of the clients on here, uh, might say, well, hey, I
know my employees and they would never sue me because of a mistake I made
or maybe a, arguably a bad fiduciary decision. Well, I’m not worried about your
employees, quite honestly, or I’m not worried about one employee being upset
about their 401k balance.

It’s the class action lawyers. And this has become a. It’s a huge money making
venture for class action plaintiff’s lawyers. Um, the godfather, the OG of
plaintiff’s lawyers, class action lawyers, I think in the last 15 years or so, they’ve
made about 600 million in attorney’s fees. That’s pretty lucrative.

There are other We’re showing your slide now on that, John. I know you can’t
see it. Oh, yeah, yeah, yeah. [00:14:00] Yeah, so this slide that’s up there now,
this is the OG of lawyers. He started by having advertisements like this. They’ve
evolved now. I’ve got a couple of clients that called me in a panic in the last
year because Other law firms were advertising on LinkedIn, and any employee
that listed this employer in their bio on LinkedIn got a This is how LinkedIn
works, I guess, got an ad and the ad said, Hey, do you work at name of the
employer?

You may have been harmed by, by your employer’s, uh, breach of fiduciary
duties, and you might be entitled to significant compensation. Give us a call.
That these are very, very sophisticated law, uh, law firms that are, Actively
marketing against this. It really came into into vogue in 2008 2009 [00:15:00]
when we had the financial crisis and you had people that were getting ready to
retire Uh, and all of a sudden they lost 50 of their 401k or 403b account balance
And then you have plaintiff’s lawyers whispering in their ear saying it wasn’t
your fault It’s your company’s fault.

Let’s bring a lawsuit. Well, that’s what’s happening. And so it’s big business.
Now, Tim, even though it’s big business and I don’t expect that to go away, I do
think we’re starting to see some signs of courts applying a little bit of
consistency in other jurisdictions, um, in the Midwest, out in, in New York,
we’re starting to see a little bit more.

recognition by the courts that if you have a good governance process, the courts
are going to give you credit for that. It’s not universal, but it is definitely
starting, we’re starting to see the tide turn more in favor of. [00:16:00] Those
companies that have a good process getting out of these cases much earlier in
the process.

That’s great. Thanks, John. I think also, um, well, I appreciate the overview of
governance and, and the Um, striking terror in the audience on why it’s
important. I’m just teasing. Uh, but thanks for sharing the backdrop of why we
need to be paying attention to it. That’s really helpful and I think it will be
critical for us to have that as the foundation when we move along.

Tim and Abigail, I think I’d like to get, um, to also pause and ask, do you have a
few thoughts on how you approach plan governance or think about it as you
Approach things with each of your client bases. And I don’t, I don’t mind who
starts. Abigail, do you wanna start with that one? Sure. Um, so, you know, I
like, uh, like, um, John said, you know, we focus, I remind my clients if you’re,
if you’re, if you have a good fiduciary process, if you’ve got good go.

Um, you’re protecting yourself as an organization, but you truly are taking care
of your people. So you’re going through and you’re reviewing fees, all the
different types of fees that could impact your participants, whether it’s the
record keeping fees, transaction fees, um, investment fees, um, and you’re,
you’re looking at the performance of the investments, the share classes that they
have access to, all of these things.

important when you’re going through that fiduciary governance to be keeping
that in mind, that this is about helping your people and, and the beneficiaries of
the plan. But it, the, the thing that we also focus on is, you know, remembering
and focusing on the, the documentation, you know, have that process, follow
that process and document the process.

Those are some of the key things that I talked to my clients about. And, and we
do a lot in terms of that documenting that process, going through these
[00:18:00] discussions, and then making sure, um, you know, we’ve got the
benchmarking documents, the quarterly review documents, the other documents
that we use in our discussions.

And then we are documenting with those meeting minutes. Those are really the
key things is making sure that we’re documenting the conversations that we’re
having and the decisions that are being made. Tim, what about you? Yeah, I
agree with everything you said, the documentation. I think sometimes I have to
remind myself we have what I call the blocking and tackling of fiduciary
governance, those items that we go through every year.

Things like fiduciary training. And as we were prepping today, I realized, you
know, the reality is even the most seasoned committees and committee
members who could probably do the fiduciary training at this point in time have
heard me go through it for the past decade. I do think they can still benefit and
pull some nuggets out of the fiduciary training, even if it isn’t that exhaustive 45
minute version.

We do our best to try to make it topical. John went through, [00:19:00] you
know, what’s going on in the landscape and we try to bring that into fiduciary
training. But the other thing I would indicate, I always say, day to day, we’re in
the fiduciary trenches. We do this for a living. We are very deep into it, very
granular.

But that is not the reality for many of our plan sponsors and committee
members who wear a multitude of hats, are responsible for so many other
benefits. And so, just thinking about that, the annual fiduciary training for them
doesn’t seem so exhaustive as us doing it every single quarter. So I just think the
repetitiveness of it, Um, can be a good thing.

It’s just making sure you have that foundation built for the governance,
documenting it. It doesn’t have to be the same amount of time each time you go
through it, but I think the documentation of the fiduciary training process. Is
really important to build on as a foundation. That’s great. Thank you, John.
I also think I would be remiss if I didn’t give you the opportunity. So much of
what we talk about around governance really ties back directly to the duties
under ERISA. And then even if you’re not a plan that’s subject to ERISA, you
know, those best practices that you’re trying to align with so that you can run a,
an efficient, um, Compliant plan.

Do you want to spend just a couple minutes? I know we got a little late start, but
do you want to spend a couple minutes talking and we’ll flip to the next slide
and just talk a little bit about fiduciaries, the different roles and responsibilities,
and how that will relate to what we’re going to jump into on good, what
governance review looks like, and things like that.

Yeah, you bet. So, so, um, if there’s anybody in the audience still on after I
scared them about their house, their car, and their boat, it is important to realize
what I’m talking about there are fiduciary related decisions, and, and, um, very
few of us are hired to be a fiduciary. Some of us are, but, but very few of us are
hired to be a fiduciary.

We’re [00:21:00] usually hired to be, um, In charge of benefits in hr, the CFO,
the controller, whatever we are, we have our day job, and then we are a
fiduciary by night. So a a fiduciary is, we’re gonna have basically two types.
Um, one type is gonna be Tim and Abigail. They are, uh, they provide their
clients, um, investment advice, investment recommendations.

And they get paid for that. Um, that makes them a fiduciary, which is, which is
why they’re very popular. Because if you are a fiduciary, you like to have. Other
co fiduciaries around you because who knows maybe Abigail and Tim Have
nicer houses and cars and boats than we do and they’re going to be more at risk
than we are Um, but but that that the investment advisor is going to be a
fiduciary and if you have an investment consultant This wouldn’t be
CAPTRUST.

You wouldn’t be a CAPTRUST client You do you need an investment
consultant that is an ERISA fiduciary But for the rest of us that don’t provide
investment advice for a fee If we have discretionary authority to interpret or
manage the assets of the plan We are going to be a fiduciary. So if I have the
authority to Change an investment option in the 401k or the 403b plan.

I’m a fiduciary if I have the ability to hire The record keeper for the retirement
plan. I am a fiduciary. Um, if, if I may have the ability to hire the auditor and
we’re going to pay the auditor to, to, to run the audit for the 401k plan. I am a
fiduciary. So anybody that has discretionary authority. Uh, over the
administration of the retirement plan is going to be a fiduciary.[00:23:00]
Like I said, you probably all have a day job. So you may be head of HR, you
may be head of finance, accounting, what have you. And you may make
decisions that impact the plan, but are not fiduciary decisions. So it’s really hard
in sometimes, sometimes we refer to this as wearing two hats. You have your
day job hat when you’re HR or finance, and then you have your night time hat
when you are a fiduciary.

It’s really important to know what hat you’re wearing, because that will help
drive the decision you’re making. Um, I think even a better analogy than two
hats, Remember who your boss is when you show up to work and you are in HR
or in finance You know exactly who your boss is your boss is, you know
Whoever’s above you on the totem pole when you are making a fiduciary
decision Your boss is not whoever’s above you in the totem pole.

Your boss is All of those participants and beneficiaries [00:24:00] in the
retirement plan and everything you do has to be How do I make my boss
happy? And so it’s really really important that you know whether or not you’re
acting as a fiduciary when you’re making that decision Or whether you’re acting
as an HR person, a finance person, an accounting person.

So with that, let me jump real quick. Um, we can, we can skip, um, two slides
ahead and go to fiduciary duties. Uh, we, we’ve talked about fiduciary duties are
very important, um, because it can generate personal liability and, and we all
care about that. So what are these fiduciary duties? Well, there are, there are
four.

Thou shall do commandments. Thou shall be a good person type
commandments. And then there’s one really big thou shall not do set of
commandments. Things that you cannot do if you want to be a good fiduciary.
[00:25:00] So what are the thou shall do? Well, everything you do as a
fiduciary, everything you do as a fiduciary has to be for the exclusive benefit of
of your bosses.

Every decision you make as a fiduciary has to be what is in the best interest of
the participants and the beneficiaries of the plan. How do I maximize benefits
for those participants and beneficiaries? How do I get their 401k or 403b
balances bigger? And then how do I drive down the expenses that might be
dragging on, on their account balances?

Cause they go hand in hand. So, so what’s, what’s in the best interest. And so if
you’re making a decision, so oftentimes you’ll get this conflict where you have
to decide on a service provider for the plan. And, you know, maybe your, Day
job boss [00:26:00] plays golf with this service provider, and you know it’s
really important to your daytime boss to keep that service provider happy and
fully employed.

Even if it’s not in the best interest of all the participants and beneficiaries
because you’re paying too much to that service provider because it’s the boss’s
golfing buddy. That is an easy example of you getting in trouble, of you putting
your house, your car, and your sailboat at risk. Because when you are deciding
whether to hire that service provider, the boss’s golf buddy, and pay that service
provider Maybe too much in fees than, than they deserve.

Uh, you are not acting in the best interest of your boss, which is the participants
and beneficiaries of the plan. Number two, commandment. You have to act as a
prudent person would act. This is really a prudent expert standard. It is
completely unfair and unreasonable. Uh, don’t [00:27:00] shoot the messenger,
but every decision you make as a fiduciary, you’re going to be judged with the
benefit of hindsight as what would an expert in making that decision have done.

So when you’re trying to decide. Should we change the International Small Cap
Equity Fund in our 401k lineup? You’re going to be judged as an expert in
evaluating International Small Cap Equity Funds. And I don’t know about you,
but most of us are not experts in evaluating international small cap equity funds,
but that’s the standard you’re going to be judged by.

So, so it’s a horrible place to be in. So what the courts have told us is, if you’re
going to be judged as an expert and you don’t have that expertise yourself, well
then, You call up Abigail and Tim and say, Hey, you guys are supposed to be
smart at investments. You got a good team behind you. Uh, I’m being judged as
an expert in international small cap equity selection.

I’m not an expert. So I’m bringing you in as a co fiduciary. So Abigail and Tim,
I want you thinking about your house, your car, your boat. And then I want you
making your recommendations to me that way. Number three, you’ve got to
follow your plan documents. This sounds basic, but gets so many people in
trouble.

Oftentimes, and we’re going to talk a little bit about this later, um, you’re going
to hear, you’re going to hear, uh, lawyers, you’re going to hear advisors,
consultants tell you, Oh my gosh, you have to have a charter if you’re going to
be a fiduciary committee. Oh my gosh, you are in charge of your 401k plan.

What I will tell you. Is don’t put anything in writing that you can’t promise me
as your lawyer that you’re going to follow. Um, Tim asked earlier about his, you
know, the, the, the inconsistent litigation. We’ve got a great case out of New
[00:29:00] York involving Goldman Sachs where they were sued, their
fiduciary committee was sued.

And one of the things the class action plaintiff’s lawyers made a big deal about,
and this is a top law firm, they said, Goldman Sachs did not have an investment
policy statement, therefore, they are bad fiduciaries, and let’s sock them with
lots of penalties, and let’s take all of their houses and cars and boats.
And the court said, There is nothing in ERISA that requires you to have an
investment policy statement. And in fact, Goldman Sachs followed a very good
process in evaluating investments, and therefore, this lawsuit is dismissed. So,
follow your planned documents. It is It is a definite best practice. It’s really
good.

If you have an investment policy statement, it’s a best practice. It’s really good.
If you have a charter, but only if you can look me in the eyes and promise me
that you will follow those documents because that’s your commandment. Lastly,
thou shall [00:30:00] diversify the assets. We don’t have to worry about this too
much on 401k plans and 403b plans because we, we offer a broad menu of
investment alternatives.

So I won’t spend a lot of time there. Last, thou shall not do. You shall not
commit what’s called a prohibited transaction. This, this is anything as a
fiduciary that just doesn’t feel right. It’s a transaction that, ah, maybe I’m getting
pressure from my boss to do. It’s a transaction with an affiliated company.

Uh, it’s a transaction with, with maybe the, maybe that’s with the employer. It’s
not quite in the best interest of the employees. It’s probably something that
wouldn’t pass the first four commandments, if we were being honest, but
Congress felt it was so bad that they were going to remove all doubt and all
ability to interpret or away and identify these prohibited transactions.

So with that done, let me pause and see where we want to take the conversation
to next. Yeah, that was great, John. Thanks for those, um, very important
reminders because they’re all what drives our actions and, um, process, um,
creation and things like that. What I want to do is shift the conversation a little
bit.

I, Tim, You said some interesting things. We, you know, when we were doing
prep work, it’s nice when we get a document that kind of lists out, um, here are
all the things that you can do. Check the box, follow this process, and you’ll be
fine. Will you spend just a minute talking about, um, How that isn’t necessarily
the case with governance.

It’s not a cookie cutter approach. Sure. Yeah, the way I, I compare it is much
like an investment lineup. Fiduciary process is not one size fits all. And I think
John did a really good job of explaining kind of the cornerstones of your
fiduciary process. The duty of loyalty is paramount. Are we doing something
that’s going to help put our participants in a better place?

Is it reasonable? You know, are you a prudent expert or working with one? And
then is it documented? All significant action items are documented in our
meeting minutes and reflected in our discussions. But above and beyond that, I
think there are intricacies to every fiduciary due diligence process at each
institution and differences.

And I think that’s frankly a good thing. And I think there are a multitude of
reasons Why you might get a variance from one institution or committee to
another, and why you don’t necessarily need to just benchmark your process
against a peer’s process. So one is, how long has the committee been working
together?

Um, we work with committees that have been together for a decade, and so they
have one way of doing things, and they may have that blocking and tackling I
alluded to earlier, down pat, and so a lot of the discussion is around
cybersecurity or Secure 2. or something that’s very topical. Versus a new
committee who’s just implementing a process where a lot of what we’re talking
about today is going to be the focus.

The committee composition is another one. We work with some of those
committees, John, that are subject matter experts on international small cap
equity. And so they’re very honed in on the investments. Others may be more
focused on, you know, plan design and education. So I think every committee is
going to differ there as well.

Your internal governance structure is huge. So we have, John, again, pointing
back to something you said, some committees where all authority has been
delegated down from the board to them to oversee everything as it pertains to
the plan. So they’re looking at plan design, the investments, the fees, the record
keeper.

We have other committees that are advisory in nature and so they know exactly
what the purview of their review is and they are doing an annual presentation up
to the board. And so inherently, There are going to be differences there,
[00:34:00] and the final thing I would say is your service model with external
counsel and your consultant.

Abigail and I were prepping and comparing notes. Even within CAPTRUST,
we approach different topics with different ways, and so I think that’s a good
thing. As long as you have those three cornerstones, you know, the prudence,
the loyalty, and the documentation of the process, I think the variation in the
fiduciary process is then not only acceptable, but can be a good thing.

Yeah, good points, Tim. I appreciate that. Um, John, we were going to have you
talk through what a, um, typical or, you know, kind of routine plan governance
review might look like. I think we’re going to. Move ahead of that 1st, and
maybe come back to that if we have time, but we showed the slide here on the
kind of overview of what a governance review might look like.

Um, but I want to move over to you, Abigail and to the next slide [00:35:00]
because. This slide, I think, is really, well, I don’t want to steal your thunder. I
think this is huge because it speaks to, as a fiduciary of a plan, what are all the
different things you need to know about your plan and be able to speak to or
show documentation for.

So will you talk to us about this slide and then I know all of us are going to
chime in. Absolutely. I think this slide is great because it’s really. Almost it’s a
checklist for a committee of all the different things to be thinking about. And,
and we call this the why slide. Um, and this really goes back to understanding
why a committee is doing the things that it’s doing.

Why is it making the decisions that it’s making? And, um, and it really, it covers
all aspects of the plan, whether it’s on the fees, the investments, your [00:36:00]
compliance side of things. And then really as the, as the, um, industry evolves
and, you know, people like to think that retirement, Is, you know, a little sleepy
industry, but, you know, the DOL and the IRS keep us on our toes and Secure
Acts and Secure Act 2.

0 keep us on our toes. So if there’s a lot of development going on all the time
and litigation, certainly as well. So this slide, I think, is phenomenal when it
comes to helping committees. To really go through a great process on all of
these things and be able to say, here’s why we’re making the decisions that we’re
making.

So having a conversation about these items and then remembering to document
it and go through the minutes because it’s not necessarily What the decision is,
but the fact that you’re having these conversations and you’re documenting
them. So, when you’ve got huge turnover on a committee, which we’ve seen a
lot of, you know, people moving around over the last few years, a lot of
turnover in committees, they don’t necessarily understand why we’ve done the
things that we’ve done up until now.

And so it’s really important to go ahead and revisit these topics. And then also
just to do it on, on a schedule to make sure that things still apply. So when we
think about, you know, on the fee side, you know, what are people paying?
Who’s getting paid by the plan by the participants, whether it’s the record keeper
or other, um, You know, auditors or whatever it is, what other services that
you’re using that people have access to, making sure that the fees are fair and
reasonable for the services that they’re getting.

When you have record keepers, their services can really vary. And so it’s
making sure, all right, if you don’t get a lot, are you not paying a lot? If you get
a lot, you might have to pay more. It doesn’t have to be the cheapest, but just
understanding the marketplace and When it comes to the different fees that
you’re paying, not just the administration fees, but transaction costs, you know,
we’re seeing people having to now think about the managed account solutions
and benchmarking those fees.

For example, that’s a newer one that’s coming out. So thinking about the
different fees that are being paid and then also thinking about The methodology
that fees are being paid. Are fees being paid fairly across all the participants?
So, you know, some people are very generous and they pay the fees corporately.

So this doesn’t necessarily apply to you for all the, um, plan fees that are being
paid. If you’re writing a check, great, very generous of you. But a lot of the fees
are paid from the plan. And then thinking about is it fairly dispersed across the
participants or is it really being driven by the investments that they’re, they’re
selecting.

So thinking about the fee methodology. If we’re thinking about investments,
You know, on the IPS, you know, John talked about the fact that you don’t have
to have an IPS. You don’t have to have a charter, but if you do, um, you know,
make sure people are aware of it, especially if you’ve got new committee
members, or if you haven’t reviewed it in a while, certainly good to go back
through and review your IPS.

Make sure you’re [00:39:00] following the IPS. If you have a charter, make sure
you’re following that charter. And things like share classes. Are you monitoring
the share classes? New share classes become available. Your plan may grow.
You may meet new thresholds that gives you access to lower cost share classes.
Making sure you’re reviewing your share classes every once in a while. You
know, on a year, an annual basis, for example. Um, that’s a good opportunity to
potentially reduce costs for your participants. Um, and then the Department of
Labor came out with Their tips for selecting and monitoring target date funds.
That’s a great resource. 26 step process to go through in terms of having a good
process for your qualified default investment alternative. If it’s a target date
fund, um, going back to fees, I know there’s one thing Tim was going to add a
good one, and this is a really good one. Um, just given what’s been changing in
the world of interest rates that, uh, you know, that’s getting more in the spotlight
recently when it comes to fees, Tim.

Sure, I’ll hit a couple of, I call them fee adjacent topics. So two things before I
jump into that, which is float income. Two other things you may consider
working into your annual fiduciary due diligence process. One, to the expense
you have a revenue credit account or an ERISA budget, making sure that’s on
the fiduciary calendar, perhaps creating a budget for that and making sure that
that doesn’t grow to be too large.

And along those same lines, forfeitures, maybe just redefining if you have a
vesting schedule, how are we able to utilize the forfeitures. Really importantly
and topical, is that what it states in our plan document, which I know John could
comment on and then making sure you’re zeroing that out, but Abigail float
income.

So I think the easiest way to define this is for certain record keepers when they
are processing transactions, they may put the money in a separate account
overnight that earns interest. You wouldn’t have heard about this a couple years
ago because interest rates were near zero, but now that they’re elevated, that
float income can be pretty substantial depending on, [00:41:00] you know, the
size of your plan.

And so a couple things you should be thinking about is A, how does our vendor
treat float income? The answer will differ pretty dramatically record keeper to
record keeper. Uh, and then B, is it disclosed? And so making sure you have a
process there in place while it’s quite topical is important, and I just wanted to
highlight for our internal record keeping RFP team, they’ve actually added a
question on float income so that when our plans are going out to bid, they’re
getting a look at the landscape to understand how different vendors are treating
the float income.

So very topical at the moment. Yeah, and it’s, it was surprising for larger plans
in particular, it can be a significant amount of money. So it is great to just make
sure it’s in the agreements. You’re going through that process of reviewing that
every year from a compliance perspective, you know, meeting minutes.

We’ve talked about those, you know, do you have meeting minutes
documenting all the, the committee meetings that have been held the decisions
that have been made? Even before that, we talked about the plan document and
making sure that you’re aware of the plan document. You know, we think it’s a
great idea, particularly if there’s turnover on the committee, to have the record
keeper come in and do a deeper dive on the plan document and make sure the
Committee is familiar with what’s in the document so that they can fill that,
fulfill that fiduciary responsibility of making sure the document is being
followed correctly.

That’s just a great, um, just good habit to get into. Um, and then the other thing I
know when this comes up a lot with, um, when we’re going through fiduciary
training, it’s always a good takeaway. All right, where are we on our, our
fidelity bond? Do we have enough coverage? How about our fiduciary liability
insurance?

Is that up to date? You know, where are we with that? And making sure that’s in
a good spot. So those are always two good options. Takeaways from our, our
fiduciary training and certainly a good thing to be, um, reviewing, um,
occasionally. Um, those are a couple of the key things. I think the other thing
that people will forget about because we’re so dependent upon record keepers
and many of them do a great job, but it’s about those participant disclosure
notices.

They are ultimately the responsibility of the plan sponsor. A lot of record
keepers draft them, um, send them out on your behalf. But it is important to
remember, ultimately, it is, it is your responsibility. It is important to understand
what’s the timeline and make sure that they are getting out in a timely manner.
Some record keepers do require the plan sponsor to send them out. So making
sure that you’re aware of those timeline requirements and getting them out in a
timely manner to meet those disclosure requirements really is a best practice for
folks. And then finally, on the other considerations, this is where we’ve seen a
lot of new things coming out.

In particular, the DOL has been very active with their guidance the last few
years, and I know that Tim had some comments he wanted to make on this
topic. Cybersecurity is the hottest of hot topics, for sure, since the Department
of Labor came out with their guidance in 2021. I can tell you we have plans
working through audits, and those audits have 8 to 10 questions on
cybersecurity.

I don’t believe there is a right answer for how to do this, but considerations
certainly include Bringing the vendor in and having them go through cyber
security, talking about how they’re complying with the DOL guidelines and the
things they’re doing to protect participant data is an option. I know for
CAPTRUST, we have a team that reviews those guidelines and we can provide
reports that can be either given to the committee, or Or I think last but not least,
if you have internal experts, if you have people in IT or HRIS who speak that
language, setting up something separate to have them go through the paces with
the record keeper, so they can really get granular and ask all the right questions.
And then you can bring those internal folks to a committee meeting for an
update. I think those are options that you have, but I think it is of the utmost
importance to have a process in place and make sure that [00:45:00] cyber
security isn’t something you’re glossing over that you’ve done in evaluation, to
Abigail’s point, of your record keepers and what they’re capable of doing.

And then, oh, go ahead. All right. One other thing was just, you know, the
evolving landscape that we talked about. Um, I know this is just a key part of,
of what we do for our clients every quarterly review and, and then other
communications we share with our clients. So, Tim, what are some things that
you do to keep your clients up to speed on this evolving landscape and fiduciary
governance process?

Yeah, like you said, it’s an exciting time. It feels like every year between Secure
and the DOL coming out with guidance and ESG, there’s just always an update.
So, I think we depend primarily on our quarterly reports and the industry update
slides. I know that come out of Raleigh, hyper focused on making sure
providing the most topical information back to our clients.

So, I would say I primarily utilize Those to get the education out. But Abigail,
do you have other, other resources [00:46:00] that you’re utilizing? So our plan
sponsors can, can stay on top of what seems to be information that’s changing
every day. I think between our industry updates are, um, you know, our, uh,
fiduciary updates.

These are really the keys that are driving our, um, committee conversations.
We’ve got a Secure Act 2. 0 website that we’ve, um, made available to folks.
And I think that’s been a phenomenal resource for people. It has, um, our
webinars that we’ve held on the Secure Act 2. 0, but it also has great timelines
for folks in terms of, you know, there’s so many, um, provisions that are coming
out.

Some are mandatory, some are optional. And those timelines really help people.
Our plan sponsor clients understand. All right, what do I need to be focused on
and prepared for as we look at this year and the year ahead? You know, Roth, I
think is a big topic of conversation. A lot of changes going on there.

So, helping plan sponsors just know what’s coming down the pike. We use that
as a tool and a resource a lot and share that with our clients as well. [00:47:00] I
think, um, what this, hearing all of this, seeing this slide and all the different
things that are considerations for, Good fiduciary governance and hearing the
things that you both have talked about, Abigail and Tim, and then what John has
mentioned, I, I, it just screams to me that if you’re not working with your
partners and involving them.

In the development and ongoing monitoring of your fiduciary governance
process, you should be. So be sure that you’re pulling them in and asking their,
for their input on what that review should look like. Um, helping you if you
don’t and haven’t already established those processes, pulling in your partners to
do so.

Um, I know we’re coming up to the hour, but I would love to lob out at least one
question to John. Um, that’s come in from our audience and I’ll say that we will
absolutely get to all the questions, even if it’s in a follow up after the webinar,
but we’ve had several come in. Um, John, this question that I want to send your
way is, and we could actually, Wendy, leave it on the key takeaways slide.

You’ll get a copy of this presentation. When we send out the recording of
today’s webinar. So I want you to know that you’ll have these slides and
obviously I couldn’t consolidate the key takeaways into my normal three or
four. There’s just a lot surrounding governance. Um, but we’ll want you to have
those.

Um, John the question that came in when you’re talking about fiduciary
responsibilities and the varied roles Someone was asking specifically we had
two questions that were somewhat around this That the function, HR functions
being a fiduciary role. So can you talk a little bit about how it really is
dependent on what actions you’re performing on behalf of the plan?

What makes you a fiduciary? Yeah, sure, you bet. Um, so what the courts do,
what the courts have said is if it walks like a duck, talks like a duck, it’s likely a
duck, and they apply that to fiduciaries as well. So, if In your organization, it
really does not matter. Not, not really. It does not matter what your title is or
your role.

So you just because you are SVP of HR does not mean you’re a fiduciary. Just
because you are the receptionist does not mean you are not a fiduciary. It all
comes down to to a facts and circumstances analysis of who has discretionary
authority to make decisions. Let me give you an example. Oftentimes we’ll see a
committee structure put together where, where we’ll have somebody from
accounting, finance, HR on this committee ostensibly with the authority to
make decisions.

But in reality, the committee never makes a decision because they do not feel
empowered to make a decision without checking with Joe down the hall,
because Joe has to decide everything. Well, Joe was smart enough, he listened
to a Shambari presentation years ago, and Joe loves his house, car, and sailboat.
So Joe said, I don’t want to be on that committee. But P. S. Don’t make any
decisions without my approval. Well, guess what? That committee, yeah, they
might be a fiduciary because they maybe make some decisions and have some
discretionary authority. But Joe, even though he doesn’t have the right title, even
though he’s not on the committee, Joe is actually in practice exercising
discretionary authority.

Joe’s gonna be a fiduciary. So it’s real important to analyze. Whether you have
discretionary authority to interpret the plan, pick service providers, pick
investments, manage, manage the administration and compare that versus are
you just following directions? So, so if you happen to work at HR or benefits
and you’re the day to day contact with your record keeper, with your
CAPTRUST representative, but you don’t have the, you know, you, you just get
everything done.

You have to get all the work done. That doesn’t mean you have the ability to.
Fire CAPTRUST if you want it or change record keepers or what have you.
That’s somebody else. You’re probably not a fiduciary even though you are the
person that is doing, you know, 40 hours a week working on the retirement
plan.

So last time I’ll say it, focus on whether or not you have discretionary authority
or responsibility over the administration of the plan. Done? Yeah, that’s great,
John. Thank you for that clarification. Again, I apologize we didn’t get to all the
questions. We will send, um, we will follow up with everyone who submitted a
question, and we will send a copy of the slide deck along with the link to the
recording.

um, within the next 24 to 48 hours. Thank you to all of our listeners for joining
us today and bearing with us through some technical problems. Thanks to our
speakers. I really appreciate the three of you taking time to prep and share your
insights and knowledge with our audience. I hope that all of you will be able to
join us again in August.

For our next webinar in the series, which will feature a discussion on fiduciary
liability and risk mitigation. So talking more about that fiduciary liability
insurance that you mentioned. So thanks so much again. Enjoy.
Disclosure: CapFinancial Partners, LLC (doing business as
“CAPTRUST” or “CAPTRUST Financial Advisors”) is an Investment
Adviser registered under the Investment Advisers Act of 1940. However,
CAPTRUST video presentations are designed to be educational and do
not include individual investment advice. Opinions expressed in this
video are subject to change without notice. Statistics and data have
come from sources believed to be reliable but are not guaranteed to be
accurate or complete. This is not a solicitation to invest in any legal,
medical, tax or accounting advice. If you require such advice, you should
contact the appropriate legal, accounting, or tax advisor. All publication
rights reserved. None of the material in this publication may be
reproduced in any form without the express written permission of
CAPTRUST: 919.870.6822 © 2024 CAPTRUST Financial Advisors

Please note: This is an AI-generated transcription. There may be slight
grammatical errors, spelling errors and/or misinterpretation of words.

Dawn McPherson:
Welcome, everyone, to our quarterly webinar series for 2024. You might recall we rolled
this out last year and we’re pleased to be able to bring you four more quarters of solid
information, either initial or ongoing education opportunities for your support in your
oversight of your corporate retirement plan or your employer’s retirement plan. So
welcome, thanks for joining us. Today’s conversation is going to revolve around roles
and responsibilities, which are fundamental aspects for those of you engaged in
retirement plan management and oversight. And I’m thrilled to be joining you today with
some very seasoned tenured panelists. You’ll see on the screen here we had a fourth
member who was unable to join us due to some technical difficulties this afternoon. So
we’re sorry to miss you, Lisa, but please to introduce you to my two panelists, Jean and
Jenny. First of all, Jean Duffy is a veteran of the retirement industry and also here with
us at CAPTRUST.

She hails from Des Moines, Iowa. And Jean’s extensive experience really lies in crafting
robust governance processes and delivering top-notch educational opportunities to
empower her plan sponsor clients. Thanks for being with us today, Jean, and also
thrilled to welcome our guest, Jenny Eller. She’s a principal in Groom Laws retirement
services practice group and their fiduciary practice. Jenny joined Groom in 1998. She
not only advises financial institutions on designing and delivery of products and services
to the retirement plan marketplace, but she also advises plan sponsors on all aspects of
ERISA fiduciary compliance. So what better guests to join us on roles and
responsibilities. Welcome Jenny.

Together both of these panelists bring a host of knowledge, insights, experience, and I
think you’ll really enjoy hearing from them today. So let’s dive in and explore the critical
roles and responsibilities that surround the management and oversight of retirement
plans. I say corporate, but we know they’re not all corporate. Jenny, it’s probably safe to
assume that our listeners today have heard of ERISA, but I think it would still be helpful
to start our conversation since this is such a foundational topic. If we just start it with a
high level reminder of ERISA and why, when we’re talking about fiduciary roles and
responsibilities, why do we talk about ERISA?

Jennifer Eller:
Sure, let’s go to the next slide for this part of the conversation. So ERISA is the federal
law that governs retirement plans that are sponsored by private employers. And so
that’s really at the highest level. What it does, it has for our purposes, really kind of three
parts. The first one, which is mostly what we’ll be talking about is the fiduciary
responsibility rules, and we’re going to unpack a lot of what that is. But one thing that’s
important for folks to know is that this law imposes really the highest duty that is known
under US law law. So it’s more than a negligence standard. It’s really a very exacting
standard, and we’ll talk about how to meet that. And the standard of the fiduciary
standards are supplemented by what are called prohibited transaction rules that
fiduciaries have to navigate as well. Less of a topic for today.

Then in addition, there are just administrative requirements, right? ERISA plans have to
file forms with the government, have to provide participants with certain types of
disclosures and that sort of thing, have to document things like how the plan is set up,
how claims are governed and that sort of thing. And then there’s a liability and
enforcement scheme. So if you don’t meet your standards under the law, if you don’t
comply with the administrative requirements, then there’s a pretty extensive set of rules
that apply in terms of how either the Department of Labor, which is the federal agency
that regulates ERISA plans or even private plaintiffs can bring actions to enforce the
terms of the law.

Dawn McPherson:
That’s great. Thank you Jenny. And I think we may have gotten Lisa. Lisa,
Lisa Keith:
Can you hear me?

Dawn McPherson:
We can hear you. This is great.

Lisa Keith:
We can’t see you. Wonderful. Thank you. I’m going to work on everyone seeing me as
we speak, so okay, I apologize. No worries.

Dawn McPherson:
Thanks for joining. And for those of you who are already on the call, Lisa was our guest
who was highlighted on the intro page and wasn’t, I thought she wasn’t going to be able
to join us. She’s a member, a senior manager on our plan consulting team here at
CAPTRUST and regularly delivers fiduciary training to plan sponsor clients and also
fields a host of questions technical in nature from our advisors and clients. So Lisa’s a
very valuable resource here to us at CAPTRUST, and we’re happy you were able to get
on even if only by audio Lisa. So with that, I think I’m going to take the next question to
you since you were able to join. So Jenny talked to us a little bit about ERISA and why
it’s of importance when we’re talking about rules and responsibilities. We do know that
not all plans are subject to ERISA and that many listeners who have joined us today
have responsibilities for plans that fall outside of ERISA. So they may be governmental
four, three B plans, healthcare, higher ed, things that where ERISA does not apply. So
answer for the group if you could. Do they have the same requirements or why would
they want to tune into a conversation about roles and responsibilities today?

Lisa Keith:
Yeah, sure, Don. So no, they don’t have to follow the duties of ERISA obviously
because they’re T subject to eissa, but we always strongly recommend that they do
follow the duties as a best practice because they are subject to state statutes. So again,
following the duties of ERISA is highly recommended.

Dawn McPherson:
That’s great. Thank you, Lisa. Jenny, I’m coming back your way and I think we’re also
going to flip to the next slide here. What makes somebody, we’re talking about fiduciary
roles and responsibilities, but let’s back up. What makes someone a fiduciary?

Jennifer Eller:
Sure. So again, I think we’re on slide five. The things that make someone a fiduciary
really are is the function that they fulfill. So one important thing to know is it’s not what
your job title is or any of those things. It’s really the old that walks like a duck and talks
like a dog, right? If you do the things that make you a fiduciary than you are one, and
there are a few different things that can cause you to be a fiduciary. One, if you have
authority or control over the management of the plan’s assets. So retirement plan assets
are held in trust. If you have the ability to make decisions about the assets in the plan’s
trust, then you’re a fiduciary if you have discretion over plan administration. So that’s
things like claims decisions, how the plan is administered, interpreting the plan, and
then if you provide investment advice for a fee, which is of the type of thing that the
CAPTRUST does.

So those are things that cause someone to be a fiduciary. There are sort of special
fiduciaries called named fiduciaries, and that’s literally just in the plan document. If it’s
the X, Y, Z plan benefit committee, that’s a named fiduciary of the plan. So that’s
something to also look out for and it’s really that fiduciary status is important because all
of the obligations that we’re going to talk about, the duties that apply under ERISA apply
to plan fiduciary. So the first question is not only what is my role, but am I acting as a
fiduciary? And then we know what bucket we’re in and we know what things to do.

Dawn McPherson:
That’s great. I remember when we were doing some prep sessions for this panel, Jenny,
that you mentioned, you like to demonstrate which hat are you wearing? So you like to
demonstrate by wearing your fiduciary hat. Did you bring your hat with you today? I
don’t

Jennifer Eller:
Know without it. This is my fiduciary hat. Love it. And if you’re a fiduciary, you could just
think about the fact that when you’re acting in that capacity, when you’re doing
undertaking fiduciary acts, it’s like you’re wearing that hat. And that is an important thing
to remember because other times you might have a different role and you’re not acting
as a fiduciary and you can think about yourself taking that hat off.

Dawn McPherson:
That’s great. Very funny. I’m glad you brought that and it is a good demonstration visual
for us to remember that. If we could go to the next slide, would you mind walking us
through the various decisions that an employer makes and what buckets those fall into?
And yeah, just talk to us a little bit about the various actions.

Jennifer Eller:
Sure. So ERISA was kind of based off of trust law, and so we have this kind of old trust
term called the setr. And so there’s really two different sets of activities that people can
undertake with respect to an ERISA plan. Setr activities are really design decisions.
You’re not required to offer a retirement plan as a private employer. There’s no rule that
says you have to have one If you choose to have one, you can design it in a lot of
different ways. So the decision about whether to establish a plan when you want to
terminate the plan, if you want to make changes to the plan to add some features like
automatic enrollment or a Roth feature or some other things about really how the plan is
designed and the types of features that it has, and then within some boundaries, like
decisions regarding plan funding, how much money you might put in a plan, how you
set it up, do you have a match, do you have a discretionary contribution?

That sort of thing. So there’s a lot of things you can do with respect to a plan that are not
fiduciary activities, and those are really about how you design the features of the plan.
And many of you might have a role in plan design and also a fiduciary role. And so
that’s another reason why it’s really helpful to sort of think about what activities you’re
undertaking when you have on your fiduciary hat, right? Then you’re in that ERISA
governed role. Eris a’s obligations don’t apply to design decisions, so you don’t have to
undertake the same process when you’re doing plan design, but when you’re acting as
a fiduciary, that’s really when the ERISA rules apply and they apply to things like how
you invest the plan’s money or how you interpret the plan or decisions around claims
and appeals. If you’re going to settle a claim against the plan or engage in litigation on
behalf of the plan or even if the plan sponsor amends the plan, but you have to
implement that. Those are all examples of fiduciary decisions.

Dawn McPherson:
Those are great examples, and again, a great visual and really focusing thinking about
what action am I doing and am I acting as a fiduciary will help. We did get a lot of
questions in the submission about that, so thanks for the time spent there. We also got
a lot of questions and Lisa and Jean, I think I’m going to come your way with this. We
got a lot of questions around structure, and I think we’re going to flip to the next slide
here, but a lot of questions around structure and we see a lot of different structures
when it comes to committees or involvement in the oversight of plans. So Jean, we’ll
start with you. Does every plan have a committee and then we’ll flip it over to Lisa to talk
about if they do have a committee. What is the committee’s role?

Jean Duffy:
Yeah, thank you. I think all the plans that I work with, every plan does have a
committee. Some of them are quite small, maybe two to three individuals serving on the
committee and some are larger where you might have 10, 12, 15. I think the
organizations that have very maybe a single simple plan design only need that small
committee where if you’ve got a plan, a larger organization that maybe has a complex
plan or multiple plans, that’s where we usually see the committees being a little bit
bigger. And sometimes the really large plans probably you’re getting up into the billion
dollars where about 25% of plans smaller than a billion would have a multiple committee
design where they might have a committee that’s really focused on the administrative
side and then a committee who’s focused more on the investment fiduciary side. So we
do see all our plans that we work with here, having committees.

Most committees I would say are usually in the three to seven member range, and we
like to see odd numbers so we don’t end up with a tie a decision. And so I would say our
average committee size is right around five, and I would say the breakup of that
committee tends to be about a third with executives from that company, maybe a third
from the HR side and a third from either the investment or the finance side. So I see that
pretty equally divided on the committees that I work with. And I think really it’s an
important role and a lot of the times I might leak over into a little bit of what Lisa says,
but I think it’s an important message. It could be said a couple times. It’s a very
important responsibility that people are willing to step up and serve as a committee
member, as a fiduciary because you are now the group that’s responsible for making
sure that the plan is operated and doing the things it needs to do, and you’re really
being held in a position of trust for those people.

So we don’t ask our committee members to be experts, but we do ask them to have
some level of familiarity with the plan and that they can be committed to the process
and we’ll help them with the fiduciary training, which we do every year for our
committees. But it’s an important role that we’re asking them to step into. So I think it’s
really important for those committee members to be devoted to what they’re being
asked to do and to show up and ask good questions, and if there are things that they
need help with to reach out and seek that help to seek the help of experts,

Lisa Keith:
Go ahead and add on. So the role of the committee is really to insulate the board from
liability. You never completely, the board can never completely get rid of the obligation
or the responsibility, but they’re actually mitigating that or insulating themselves by
delegating that specific responsibility to the committee. And there are different, the way
you want to form a committee is really dependent on your organization. Most
committees we see do have some kind of administrative and investment focus. There
are some that are just focused on investments, some that are just administrative, some
that have subcommittees. So there’s really no right or wrong answer. It’s really what
works for your organization and your governance. We’re actually going to talk much
more about that in a future webinar if you want to listen in on that. But I’m going to ask
you a question, Jenny, on your opinion on questions we get on committee makeup. So
we oftentimes will have a CEO sitting on a committee or maybe an in-house council. So
what your opinion on how you feel about that?

Jennifer Eller:
Right. Well, I’ll start with the in-house council. And again, I totally agree with you.
There’s no right or wrong way and there’s no hard and fast rules. The tricky part about
having in-house counsel as part of the committee is sometimes it can be unclear when
that person is providing legal advice and when they are participating as a member of the
committee. And there’s some sort of attorney client privilege things we don’t need to get
into, but there can be some confusion there. So I do have some clients who have in
house council serve on committees, but those are typically council who really wouldn’t
be in a position to advise the committee. So it kind of does away with that confusion, but
that’s generally the concern with having lawyers on the committees. And then in terms
of the CEO, again, it really kind of depends. I’ve certainly had some clients say as to the
CEO or the cfo, this person is so good and so invested as a committee member that we
really think it’s important that they continue to be on the committee. That said, I always
tell people you want committee members who are senior enough in the organization
that they can really exercise some independence on behalf of the plan, but not so senior
that they can’t really focus on their duties. And oftentimes C-E-O-C-F-O level, that’s
pretty hard. It’s pretty hard to get on someone’s calendar. And as you point out, Lisa,
there’s some role for shielding the board and the CEO is often a member of the board.

Jean Duffy:
Yeah. Can I add something there too, Lisa? I think one of the things I’ve seen at the
CEO EO level is I’ve had one instance where the CEO was just such a strong
personality that whatever he said, nobody else was going to argue it or bring up. So I
think that’s the other risk that sometimes making sure that we’re asking the CEO or the
CFO to serve in that capacity, that they’re a good leader and they’re nimble enough to
engage in conversation and get the opinions of others. So that’s one thing that I would
say.

Dawn McPherson:
Yeah, that’s great perspective. Thank you all. So we’ve talked a lot about what makes
somebody a fiduciary, the varied structures of committees, this and then their fiduciary
or their responsibilities. This slide in particular, Jenny, I think depicts the various roles of
and makeup of fiduciary structure. What I think I’d like to do, if you don’t mind, is take a
few minutes and talk about, we got a lot of questions around what other providers that
we’re engaged with in support of our retirement plan are acting as fiduciary or in what
capacity are they acting? And so where does that line end? And so maybe we could
take this into parts as well. And I’ll ask you, Jenny, the question, is my record keeper a
fiduciary? Can I the plan sponsor, outsource or transfer that responsibility? And then
we’ll flip things to Jean to maybe talk about it from an advisor side.

Jennifer Eller:
Sure. So typically record keepers are not fiduciaries. There’s a pretty old authority that
essentially says if you are carrying out kind of ministerial responsibilities, if you’re
following directions essentially. So record keepers, they keep track of contributions, they
keep track of distributions, they follow directions in terms of investments, that sort of
thing. And so typically they don’t, as a record keeper, they don’t have a fiduciary role.
Now your record keeper might be related to the plan’s trustee, they don’t have to be, but
often those two services are bundled together and the trustee of a plan is a fiduciary.
Now they can be kind of a limited purpose fiduciary or not most of the time, these days
in 401k type plans, the plan’s trustee will be a directed trustee, which means they have
a pretty narrow universe of fiduciary responsibilities. And then sometimes the plans
record keeper might have other sort of services that they provide, like 3(21) type
services, which Jean can talk about that again, where they’d have a fiduciary
responsibility.

And then real quick on the outsourcing question, we sort of see that a lot. What are the
options for outsourcing? And there’s a few different ones. There are some obligations
that the law imposes about plan administration on the plans administrator, and those
are a little harder to outsource, but there’s some ways you can contract with your record
keeper to at least carry out a lot of those functions, if not assume the legal liability. And
then in terms of investments, you can outsource a lot of that to a particular type of
investment provider, which I’ll turn it over to Jean to talk about.

Dawn McPherson:
That’s perfect segue. Thank you so much. So Jean, I think you’ll explain the difference
or how those roles or how that responsibility is transferred and the difference between,
we got lots of questions around 3(21) and 3(38) and how each of those impacts the
sponsor’s liability. So I’ll turn it over to you to cover that.

Jean Duffy:
Yeah, certainly when Jenny talked about what makes a fiduciary one is someone who’s
paid to give an investment advice. So CAPTRUST is a fiduciary to our clients. The
question becomes are we a 3(21) investment advisor or a 3(38) investment manager to
decide that level of fiduciary responsibility? So 3(21), the investment advisor
relationship is where the advisor is going to make investment recommendations to the
committee, the plan sponsor or the committee is going to make the final decision on the
investments, and it’s going to own the liability for that investment decision with a 3(38)
investment manager, which we’re seeing a lot more interest in this and a lot of our
clients moving this direction also, you’ll refer to it, people refer to it as taking discretion
as your investment advisor taking discretion. And that is where the investment advisor is
really making the final decision on the investments and is going to own the liability on
that investment decision.

This really represents the highest level of investment liability transfer possible under
ERISA. So I like to explain this to my committees or plan sponsor is basically turning the
keys of the car over to me and I’m driving, I’m deciding which turns we’re making, where
we’re stopping when we’re going, and I’m taking on that responsibility. Air cap trust is for
our clients. So this really relieves the plan sponsor and all the plan fiduciaries of all
fiduciary responsibility for the investment decisions made by the investment manager.
The plan sponsor of the committee does still have the responsibility to monitor that
service provider to make sure that we’re doing what we’re supposed to be doing. It
doesn’t mean that they have to second guess the investment decisions. They just have
to be responsible for making sure that we’ve done what we’ve said we’re going to do by
serving as that 3(38) investment manager. So really the shifting of the fiduciary
responsibility is probably the biggest item there and the biggest advantage to clients of
using that 3(38) investment manager, and we know this with lawsuits and litigation and
heightened scrutiny on the legislative side, many plan sponsors are looking for ways to
insulate themselves to produce more protection for themselves, excuse me. And the
3(38) investment manager is one way that they can do that, especially if they’re not
comfortable making those investment decisions. So that’s how I would describe the
difference between 3(21) and 3(38) investment manager.

Dawn McPherson:
Thank you. Jean. We’re going to shift to the next slide, and I think we’ve spent some
time alluding to and talking at a high level about some of the duties under ERISA, but I’d
like us to spend the next few minutes on some of these key fiduciary obligations. And I
think the three of you have divvied these up based on the questions for received. So
Jenny, why don’t you start us off and talk about the duty of prudence?

Jennifer Eller:
Sure. As you said, we’ve been talking about, well, what does it mean to be a fiduciary?
What’s the difference between the fiduciary role and the set law or the plan sponsor
role? And again, we really care about that because identifying who’s a fiduciary means
now we know upon whom do these duties rest. And Lisa made the good point that often
you want fiduciary committees, and one of the reasons you want to have a fiduciary
committee in addition to maybe some liability protection say for the board is because
then you can better document that you’ve done the things you’re supposed to do as a
fiduciary. Committees have meetings and they take minutes and we know who’s on
them, and we know when someone joins a committee and when someone leaves a
committee, when we know when we’re in a committee meeting. So there’s lots of good
reasons to have a fiduciary committee.

One of them is to be able to document what we call a prudent process. So one of the
duties that applies to fiduciaries under ERISA is the duty to act in a prudent manner.
And it’s not just sort of prudence as in just a regular prudent person, but it’s really what
we’d call a prudent expert standard. You have to make decisions and engage in the
process in the same way that someone who is familiar with this type of decision in the
same way that they would, it’s not the same as guaranteeing the success of a decision.
We’re not the insurer that never makes a decision that doesn’t turn out well. Nobody can
anticipate market movements and things like that, but so it’s not the case that you have
an absolute duty, but what you do have a responsibility to do is to document a good
decision making process. And I like to quote from an old case, it’s not enough to mean,
well, a pure heart and an empty head, that’s not a substitute for proper analysis. So
those are sort of the bookends, right? You’re not guarantor, but you can’t just have good
intentions. And in order to really establish a prudent process, you have to find a way to
document the decisions that you’ve made, and you have to be able to document that
you’ve employed the process that would be done in by a similarly situated expert.

Dawn McPherson:
I think the next slide is a good demonstration or visual of that process,

Jennifer Eller:
Right? Because the next thing people ask is like, okay, fine. How do I do that? How do I
demonstrate that I’ve engaged in this prudent process? And it’s a little frustrating
because courts and the labor department will say, well, it’s a facts and circumstances
analysis, and it’s one of those, you kind of know it when you see it, which there’s
nothing more frustrating for someone who’s sitting in a fiduciary committee meeting and
they just decided they have one of these hats and they want to know what they’re
supposed to do. So here’s a breakdown of the types of things that go into a prudent
process, and it’s, as you see, pretty conceptual. So what’s the information that you need
to know to make a good decision? And what do you get that information from? You get
it from reliable independent sources. That often means consulting with experts.

One of the reasons that many, many plans have plan fiduciaries work with an
investment advisor is because that’s a place to get that expertise, especially as it relates
to plan investments. That’s a really common way to identify that expertise. And then
when you make a decision like what in the information that you’ve received, what’s the
basis for that decision? And it’s not always black and white. Sometimes the answer is,
well, some committees do it this way, and some committees make a different decision.
There’s not only one right decision, just have to identify what are the things that form the
basis for that decision. Make an informed decision on the basis of the information
provided and then write it down, document your decision. It doesn’t have to be, well, two
people voted this way and one people voted that one person voted that way, but we
talked about this, we gathered some information and we thought it was most important
factors, A, B, and C, and therefore made that particular decision.

Dawn McPherson:
Yeah, I like that visual. It’s very helpful. And I stacked you up here, so you can’t even
take a sip of water or anything because we’re going to flip into the next slide and have
you also cover our duty of loyalty. And then I promise Jean and Lisa, you’re up next.

Jennifer Eller:
So one of the other key responsibilities that you have as an ERISA fiduciary is to act
solely in the interest of participants and beneficiaries. And again, this is another guys
are going to be sick of me in my hat, but when you’re acting as a fiduciary, then that’s all
you’re allowed to think about is what is best for participants and beneficiaries, not sort of
a trade off. Well, what’s good for the employer and what’s good for participants and
beneficiaries. You really have to only think about what’s in participant’s best interest. But
that’s one of the reasons it’s important to understand when you’re not acting as a
fiduciary. So if you are the plan sponsor and you’re thinking about, well, should I add
auto enrollment and auto escalation? You can think about, well, how much money will
that cost me as an employer? What are the things that as an employer, I want to incent?
What are the things that are important to me? So you can absolutely think about those
things when you’re thinking about design decisions, but when for instance, you’re
deciding, gee, should we keep this plan, this investment option as part of the plan, or
should we get rid of it? Should we choose the lower cost investment option or
something that costs more? And what are the trade-offs? Those are the times you really
have to be focused solely on this duty of loyalty. So it’s really important to know what
capacity you’re acting in.

Dawn McPherson:
Do you pass those hats out at your committee meetings and make people put them on
in their acting seats?

Jennifer Eller:
Meetings? Well, I wouldn’t get invited to as many committee meetings as I go to if I
made people put them on, but I will tell you that we send them out and people tell me
that they like them perhaps in order not to hurt my feelings, but it is a good visual and
I’ve seen them on many a client’s bookshelf.

Dawn McPherson:
I like it. Alright, Lisa, I promised I was coming your way. Let’s dive in a little bit, and I
know you get asked a lot about this, but about following the plan document and how
important that is, and we can flip to the next slide.

Lisa Keith:
Yeah, absolutely. So following the plan document is a fiduciary responsibility. And when
I’m doing these trainings, oftentimes I just assume what everyone knows what I need by
plan document. And so I’ll kind of go into more detail for all of you who wonder, what do
you mean here? So the plan document is really, I’d like to maybe attend it to a user
manual. So it’s the user manual for your plan. So within your plan, it talks about the
provisions of your plan, what your eligibility is, contribution levels, provisions that are
governed by the IRS. So the document is governed by the IRS. We talked about the
DOLA lot, but this is one area that this is the IRS’s purview. Now, failure to follow the
plan provisions in your plan could result in fines or penalties from the IRS. So it is really
important to make sure that you are following those provisions.

Now, I think maybe Jenny mentioned this a little bit ago. As a committee member, you
don’t need to know every provision of the plan inside and out, but you should have a
good overall understanding of your plan document. So I do recommend that you do look
at least at the summary plan description. That is the layman’s book that you give to your
participants. So I do recommend you do that. And typically you do have someone on the
committee or who’s close to the committee that works very closely with your record
keeper to make sure that you’re on task. But one thing I do recommend that committee
members do periodically is to set time aside to talk to their relationship managers. And I
know you talk about planned health, that’s always important, but also to talk about
changes in the law that may affect your plan such as Secure 0.0, which we’re all dealing
with now to talk about plan design changes.

You’re thinking about how it might affect your plan and just to ask questions. So it’s
really important to have that regular dialogue with you, with your relationship manager.
And also keep in mind that those plan documents do need to be updated to reflect
changes in the law. If you do have a prototype plan document, which many of us do
have, that needs to be restated, it was every six years. I think they’re changing that now.
But it does need to be restated periodically. Your plans will need to be amended, for
example, secure 2.0. So whoever is drafting that document for you, they’re going to
drive that process for you. They’re going to let you know if your plan needs to be
restated or amended, but it’s still your ultimate responsibility to make sure those
documents are reviewed first and then dated and signed timely.

Dawn McPherson:
That’s great. Lisa, thank you so much. Let’s go right into monitoring and supervising and
make a few comments on that before Jean talks about reasonable plan costs.

Lisa Keith:
Sure,

Dawn McPherson:
We can go to the next slide.

Lisa Keith:
So Jean already set us up for this slide as well as Jenny. So you do hire a prudent
expert to perform certain duties for you. In this case here we’re talking about the steps
that CAPTRUST will take as your advisor to monitor and supervise the fund managers
in your plan. So we’re performing these duties for you as your expert, and it depends on
the level of fiduciary responsibility, 3(21) or 3(38) on how that works. Jane did a great
job explaining that. So you’ve hired us to do that, but you still have an ultimate
responsibility to monitor and supervise us as well as all your other service providers to
make sure they’re all doing what that they would do in our case that we are providing
impartial conduct and best standards. Now the DOL says, you should do this every few
years. One thing I do tell committees, a great way to make sure you’re meeting this goal
or accomplishing this duty is that you do have a regular dialogue with all of your service
providers and that you document that you’re doing. So that will go a long way to fulfill
that.

Dawn McPherson:
I might also throw in, I’ve been monitoring the chat and the questions that are coming in,
and this is timely because it seems to fit between monitoring and supervising and
evaluating your plan fees. And so we can have Jean talk about fees and then if Jean,
Jenny or Lisa want to comment on this, but lots of questions around someone else
coming in and providing a quote for services that it’s lower than what you’re currently
paying and them telling you you’re not being a good fiduciary because they can save
you money and you’re not going with them. So maybe a little conversation about, which
I know is part of the next slide that jean’s going to cover on the ensuring reasonable
plan costs. Maybe a little commentary also on what other factors you’re considering and
the fact that it doesn’t have to be the lowest cost Jean.

Jean Duffy:
Yes, absolutely. Thanks Dawn. I would like to add a couple things to Lisa’s comments
around knowing the plan document and following the plan document because there’s so
many times it happens every year where I get a call from a client where they’ve realized
they did something wrong. And lots of times I would tell you if you want an actionable
item around what are the key items where people make mistakes on their plan
document in the administration of the plan. One is the definition of compensation. So if
you want an area to look at the definition of compensation, make sure you’re using the
right definition of compensation. The second one is around eligibility. And I would say
that people still get confused with the law around health insurance and 401k plans and
they’re not the same. So people think, well, they don’t work 30 hours a week, so I didn’t
have to include them in the 401k plan.

That’s not how it works in the 401k plan and especially depends on what your plan
document says if you’re even using any hours measurement at all or if you’re just using
elapsed time. So I think that’d be another area to dig into, make sure you’re not
excluding people who shouldn’t be excluded. And then if you haven’t started to dig into
conversations around the new part-time employee rule, that is when Lisa and I have
been on clients calls with many clients trying to dig in, figure this out for them, what do
they need to do? How do they want to proceed? So I would encourage you to take a
look at that if you have an opportunity to do that. But if we look at,

Lisa Keith:
Oh, and Gina, I just want to add one more thing. I know we go on and on about that. If
you even suspect you have any kind of issue, please reach out to us or your record
keeper. The IRS has made it much easier to make corrections. A lot of things can be
self-corrected, but it’s always better to just if you think you have a problem to reach out
and try to resolve it as opposed hoping it will go away. So go ahead Jean.

Jean Duffy:
Awesome. Absolutely. So the duty to ensure reasonable plan costs. So ERISA does
require that fees and expenses paid to service providers for your retirement plan must
be reasonable when considering the value of the services you’re getting. It doesn’t
mean you have to have the lowest cost. Obviously, the best way for you to know is to do
a fee benchmark every couple years. We recommend an external fee benchmark every
two to three years where we’re going to the marketplace for our clients and getting bids
and making sure that the fees stay competitive. Again, not necessarily the lowest. I just
delivered a fee benchmark yesterday to a new client and they’re leaning on if I ranked
the lowest one as number one and the second lowest as two. And then on down to
number five, they’re looking at bringing in three and four based on the reputation of the
firm, based on what they know, the technology, how they’re going to work with the
participants, how they’re best known for what size of plans are they mostly record
keeping and administering.

If they’re known to be really work in the small plan space and this client is a 200 million
or 400, $500 million plan, they might not want the ones that are best known in the
smaller end of the space. So I think you’ve got to consider those other factors. And
ERISA doesn’t require you to have the lowest cost just for it to be reasonably priced.
And the range we’re seeing on the bids coming in have really compressed anyway.
They’re really close together. So usually the ones that we’re putting in front of ’em we’re
like Any one of ’em is fine. We wouldn’t have put ’em in front of you if we didn’t think any
one of them was fine. So I think just to keep that in mind, we definitely want our clients
to know what they’re paying for expenses, who they’re paying, how they’re being paid
and if they’re reasonable.

So those are conversations we had in the past. It was very common to use revenue
sharing to pay for some or all of the plan costs. And this is for those of you who don’t
understand revenue sharing, this is where the expense ratios include an additional
amount called revenue sharing that is then provided back to the record keeper to use to
offset the fees lots of times for the record keeping fees, sometimes for the investment
advisory fees as well. And now the contemporary way to really handle plan expenses is
to make things as transparent and clean as possible. So a lot of plans are looking to
remove that revenue sharing. Most of my clients have removed the revenue sharing.
There are still a few of the smaller ones that have it in there, and it’s not necessarily
prohibited, but you just have to have an understanding of how those fees are being
collected and how the participants are seeing those fees or not those fees, how that’s
being displayed, and make sure you’re comfortable with that.

So I think on the expenses, remember it isn’t required that you have the cheapest, but
that the fees are reasonable. And then I think one of the things that I will add there is we
often get questions about what expenses can be paid from the plan, and Jenny’s done a
really nice job setting up the difference on what our fiduciary activities versus settler. So
generally speaking, fees related to fiduciary activities can be paid by the plan assets. So
record keeping plan administration, advisory fees, audit fees are all fees that would be
acceptable for the plan to cover those expenses. So I’d open it up and see if Jenny or at
Lisa have anything else they would want to add around fees.

Jennifer Eller:
The only thing I would add is I like to just remind clients that there are exactly two things
that assets of an ERISA plan can be used for. They can be used to pay benefits, that’s
the whole point of the plan, and they can be used to pay the reasonable expenses of
plan administration. There’s nothing else. ERISA the plan assets of your 401k plan
cannot be used to pay benefits under your health plan or your pension plan fiduciaries
that are on your committee. Internal fiduciaries can’t get a special fee if they’re already
getting paid as part of their regular employment. So I a hundred percent agree with the
not required to have the least expensive plan or the least expensive record keeper or
the least expensive investment option. And I think a lot of plan committees and
sponsors are pretty spooked by that. They see so much litigation over fees, but as you
point out, jean expenses have come down, there’s a lot of fee compression, all that sort
of thing. And so I like everything that you said.

Dawn McPherson:
Yeah, and just would you say, Jenny, that it’s just of most importance that with whatever
your decision is, if you’re picking the lowest cost provider or you’re picking something
different for other reasons, it’s just important that you recognize how you made the
decision and document why you made the decision.

Jennifer Eller:
Right, exactly. You might look at two investment options and there of the type that you
think, well, we really think that provider A has a better track record and we think they’ve
got a better philosophy and more things that are important to how that fund would fit in
our lineup. Same thing with a record keeper. So really understanding what the
differences are, why they’re different. Courts have not said, you can only have index
funds in your plan. There’s no rule that says that. If that makes sense for your plan and
your population, great. And if not, that’s okay too.

Jean Duffy:
That’s great. Hey Don, I think to specifically answer the one question about someone
coming in and saying you’re not doing your fiduciary responsibilities is to say that the
response back would be to say, we know we have an obligation to benchmark and look
at our fees every couple years, and we do. We also know that as a fiduciary, we don’t
have to have the lowest cost plan. We just have to pay reasonable plan expensive. I
mean, I appreciate people bringing to the forefront, are you doing what you need to as a
fiduciary? But I don’t like, and Jenny and I were talking about this a little bit earlier, just
the scare tactics seems to be a scare tactic because you’re not doing what you’re
supposed to be doing. You should be paying attention to expenses, but there’s nothing
to say that you have to have the lowest cost out there.

Dawn McPherson:
I didn’t mean to laugh at scare tactics, but I’m laughing because it’s a great segue into
one of our last slides, which is on liability enforcement and protection. And we don’t
want to scare people, but this slide can be a little scary. So Jenny, I’m going to let you
handle that.

Jennifer Eller:
Sure. Well, so we talked about what it means to be a fiduciary, and then we talked
about what your obligations are. You have to be prudent, you have to be loyal, you have
to follow the plan terms, you have to do a good job monitoring. You have to make sure
the expenses of the plan are reasonable. So what happens if you don’t? What if you
breach your responsibilities? So the law empowers the Department of Labor and
individual participants to bring a lawsuit to enforce the terms of the plan and to recover
losses from the plan courts and the labor department can impose penalties. So there’s a
lot of teeth in the law and predecessor laws didn’t have those viability and enforcement
provisions and ERISA does we say that not to scare people, but to help you understand
why companies, you have a mission, which is important, and why is it that we spend
time on this sort of activity?

Well, it’s because there could be liability that ultimately would come back to the
employer. You can be removed as a fiduciary if you don’t do your job. And the law is this
last, I just want to premise the very last bullet here. It is not exactly what we mean. The
law is set up to impose what we call personal liability, which are the kinds of things that
could affect the things that you own and your own assets in practice. Plans can have
insurance so that the insurance can make the plan whole for losses and plan sponsors
typically do and can indemnify fiduciaries who are doing this job in the context of their
employment. So it is not the kind of thing that is typically what planned fiduciaries worry
about, but we do say that just to make clear that it’s important and there can be real
consequences. And I believe, right Don, you all are having, another part of this series
will be on fiduciary insurance and some related topics, so that might be a good thing for
people to tune into. Yes.

Dawn McPherson:
Thank you for mentioning that, Jenny. We’ll be spending time talking about liability and
ways you can mitigate that risk and protect your plan fiduciaries. So that will be our
August or third quarter webinar this year. So we’re coming up against our time and we
want to make sure we get everybody out of here on time. But if we’ll flip to the last slide,
we left you with a few key takeaways and there was one thing that Jean had mentioned.
We barely skimmed the surface though. This has been great information shared and
you’ve covered a whole host of things. We’ve still barely skimmed the surface with
what’s out there that is helpful for fiduciaries as they’re providing oversight to their plans.
And Jean, you have a great tool that you leverage with your plan sponsor clients and
many of us, many advisors across CAPTRUST utilize this. And we’re going to be
sending it out when we send the slides, but would you just touch on what the fiduciary
checklist is?

Jean Duffy:
Yeah, I think the checklist provides a great framework for the plan sponsor or the
committee to walk through. We annually just understanding what have we done? Do we
know where our plan document is? Do we know where our fee disclosures are? When’s
the last time we did a fee benchmark? Do we know where our meeting minutes are?
What’s our process? Understanding the structure and then being committed to just
taking a look at that. We used to talk a lot about the three Fs. We used to call it funds,
fees and fiduciary. And now I think that the core of the discussions around these
fiduciaries, maybe we’ve turned it into the three Ps, and I would say it’s really about
process prudent and protection. So have a great process in place, be a prudent expert
or hire the expertise to help you do those things and then make sure you’re doing what
you need to do to have that. Obviously the fidelity bond is pretty easy. Fiduciary
insurance. And then just making sure you document, I mean, it’s the meeting minutes
that are being asked for when these lawsuits are brought forth, what have these
committees been doing? What process have they had in place? And I think having a
checklist would just help you walk through that and make sure you’re doing what you
need to do to serve as a fiduciary for the plan participants.

Dawn McPherson:
Thank you, Jean. And thank each of you for joining us today. Thanks to our panelists.
This has been a tremendous help and resource. I want to encourage you, if you’ve
signed up today and you work with an advisor, if you have additional questions, please
reach out. We are all here to help you. We will be sending a copy of this slide deck in
addition to a link to the recording so you can listen to it again if you choose to, and we’ll
send that fiduciary checklist that Jean mentioned. I also want to note that we did get a
number of questions in the chat that we weren’t able to address, though we covered a
lot. I will do my best to get answers to each of you in the coming days so that your
questions don’t go unanswered. So thanks again for joining us. We’ll have three other
sessions this year and hope you can join us for those. Have a great day.

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