As workplace retirement plans continue to become the predominant method that American workers are using to save for retirement, the fiduciary responsibilities of retirement plan committees are becoming more complex, according to SEI.
The majority of the members of plan committees come from the human resources department, and these individuals may not be equipped to assess investments, SEI notes. In addition, they are only offered limited resources when it comes to selecting funds. For these reasons, SEI expects more plan committees will turn to outside resources such as advisers and Employee Retirement Income Security Act (ERISA) attorneys.
SEI surveyed 231 executives who serve on their firm’s retirement plan committee and found that 86% of them are making investment lineup decisions. However, 12% are turning to their finance or treasury department to handle this.
SEI learned that 38% of the members of retirement plan committees come from the human resources department. Thirty-three percent are from finance, 25% are from executive management, and 4% come from the legal or compliance department.
Eighty-four percent of retirement plan committee members do not think their participants will have enough saved if they retire between the ages of 62 and 65. Fifty-two percent think that because 401(k) plans were not initially designed to be people’s primary retirement vehicle, they need to be redesigned.
Ninety-two percent think they have a fiduciary responsibility to offer the best investment options available. Forty-six percent said that “quality of investment options” is the most important factor when selecting funds. Fifty-two percent said avoiding litigation is the committee’s No. 1 priority.NEXT: Do they have enough resources?