Five Items Every Retirement Plan Sponsor Should Review Before Year-End: A Practical Mid-Year Check-In for Fiduciary Committees and Business Owners
August can be a useful time for retirement plan sponsors to take a step back and evaluate how their plan is operating before year-end deadlines begin to stack up. Compliance testing, payroll closeouts, budget planning, and committee meetings often compete for attention during the final months of the year. A focused review now can help identify potential issues early, improve fiduciary documentation, and may help make year-end administration more manageable.
Retirement plan oversight does not need to be complicated. A practical review often starts with five key areas: compliance preparation, fiduciary governance, participant outcomes, plan fees and services, and administrative cleanup.
1. Review Compliance Requirements
One of the most important questions a plan sponsor can ask is whether the plan operates according to its governing documents. This includes confirming that eligible employees had the opportunity to participate and that the plan administers employee deferrals, employer contributions, loans, hardship withdrawals, and compensation definitions correctly.
The IRS encourages sponsors to conduct regular reviews of their plan operations and highlights areas such as eligibility, plan document compliance, timely deposit of employee deferrals, nondiscrimination testing, and Form 5500 filing requirements.
Finding a problem before year-end may provide more flexibility for addressing it. The IRS and Department of Labor both offer correction programs that can help plan sponsors resolve certain operational errors while protecting participant benefits and maintaining compliance.
As part of a year-end review, sponsors may want to confirm census data accuracy, review contribution calculations, and discuss any emerging testing concerns with their third-party administrator or recordkeeper.
2. Evaluate Fiduciary Governance Practices
A documented process is an important part of strong fiduciary governance. While no committee can eliminate every risk, maintaining a consistent approach to oversight can help demonstrate prudent decision-making.
Under ERISA, fiduciaries generally must act in the interests of plan participants and beneficiaries, follow plan documents when consistent with applicable law, monitor plan service providers, and ensure that plan expenses are reasonable. Guidance from both the Department of Labor and IRS outlines these responsibilities.
Before year-end, fiduciary committees may benefit from reviewing whether scheduled meetings occurred and whether the committee prepared meeting minutes, documented investment reviews, and completed assigned action items. This is also a good opportunity to confirm that fiduciary roles remain clearly defined, particularly if there have been personnel changes or new service provider relationships during the year.
Committee calendars tend to fill quickly late in the year, so scheduling the next meeting in advance may help support continuity in governance efforts.
3. Assess Participant Outcomes
A retirement plan serves as an employee benefit designed to help participants save for retirement. Reviewing participant data can provide insight into how employees are engaging with the plan and whether additional education may be helpful.
Plan sponsors may consider reviewing participation rates, average deferral rates, Roth contribution usage, catch-up contribution activity, loan utilization, hardship withdrawal trends, and enrollment in default investment options. Many recordkeepers also provide retirement readiness or participant engagement reports that can help identify areas for further review.
This analysis does not need to be extensive. Even a high-level review of savings trends may reveal opportunities to help improve employee awareness of available resources before open enrollment periods, benefits communications, or year-end notices go out.
Sponsors may also want to evaluate whether any automatic enrollment or automatic escalation features are functioning as intended.
4. Review Plan Fees and Services
Plan fees remain an important part of fiduciary oversight because they directly affect participant accounts. The Department of Labor notes that fiduciaries are responsible for understanding plan fees, evaluating service arrangements, and determining whether expenses are reasonable relative to the services the plan provides.
A year-end review does not necessarily require a full RFP process. In many cases, sponsors can begin by reviewing recordkeeping fees, investment expenses, advisory fees, administrative costs, and any revenue-sharing arrangements that may apply.
It can also be helpful to review the services themselves. Sponsors may want to confirm that the plan receives the support, resources, and solutions its service agreements outline. Documenting the review process and resulting conclusions can also help support fiduciary records.
5. Complete Administrative Cleanup
Small administrative issues can become more difficult to address over time. Year-end provides an opportunity to organize records and resolve outstanding items before they create larger operational challenges.
Areas for review may include returned mail, undeliverable emails, uncashed distribution checks, outdated beneficiary information, incomplete committee records, and stale service provider contact information. The Department of Labor has identified missing participants as an area of ongoing regulatory focus and provides guidance on maintaining accurate participant records and documenting search efforts when sponsors cannot locate participants.
Sponsors may also want to confirm that they have organized and can easily access plan amendments, summary plan descriptions, participant notices, service agreements, investment reports, and Form 5500 records.
Final Thoughts
A year-end retirement plan review does not need to be lengthy to be effective. By focusing on compliance, fiduciary governance, participant outcomes, plan fees, and administrative matters, plan sponsors can identify potential issues early and maintain documentation that supports their oversight process.
Taking time to review these areas before year-end may help reduce last-minute surprises and provide a clearer picture of the plan’s current operations as the new year approaches.
This is intended for informational purposes only. You should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from Savant. Please consult your investment professional regarding your unique situation.
Patricia L. Hutchinson
Director of Retirement Plan Services
AIF®, MBA