You might be surprised to learn that in 2015, the average retirement plan Department of Labor (DOL) audited fine was $424,000. Whereas, the average medical malpractice settlement is $425,000. While both are astronomical and business crippling, thankfully, with the right policies and procedures, we understand that there are ways to reduce the risk.
We are going to focus on your office’s retirement plan and how to approach your fiduciary responsibility with the same loyalty and ethical standards as the Hippocratic Oath.
Step 1: Implement an Investment Policy Statement (IPS)
The purpose of an Investment Policy Statement (IPS) is to assist your Investment Committee when effectively supervising, monitoring, and evaluating the management of the retirement plan. Your Committee has the authority to oversee the investment of the plan’s assets. Also,—and very importantly—the Committee has the ability to delegate certain responsibilities to support the best interests of your participants and their beneficiaries.
An IPS is a formal and legal document. For a sample, click here.
Step 2: Host Committee Meetings
It is a best practice to host semi-annual committee meetings to review your company’s retirement plan and address any future changes. During these meetings, the structure should follow an agenda and someone should take meeting minutes. In the 401(k) world, the process that got you to your decision might be more important than the decision itself. Therefore, it’s a best practice to take detailed meeting minutes.
For a sample Retirement Plan Committee preparation outline and agenda suggestions, click here.
Step 3: Organize Your Documents
Last and definitely not least, get organized. Place all of your retirement plan documents in an easily accessibly file. That includes:
- Investment Policy Statement (IPS)
- Retirement Plan Committee agendas and meeting minutes
- Investment reports
- Disclosure notices
- Employee notices
- Plan documents and amendments
- 5500 testings
- Service provider contracts
- Other plan related documents
In the event of a plan audit, you should easily be able to produce all requested materials in a timely manner. By staying organized, you can limit the stress and chaos that a plan audit creates.
As a doctor, you understand the risks, liabilities, and consequences of non-compliance. Therefore, when a patient comes to you and it’s outside your scope of expertise, what do you do? Most would agree that you would refer that patient to a specialist.
Well—that’s what we are. We are retirement plan specialists. We help our clients follow a formal fiduciary process to minimize business risks. While, at the same time, we focus on participant outcomes. We strive to help everyone achieve a happy and healthy retirement future.
 Department of Labor. “EBSA Restores Over $696.3 Million to Employee Benefit Plans, Participants and Beneficiaries.” 1 January 2016. http://www.dol.gov/ebsa/newsroom/fsFYagencyresults.html
 Lawfirm.com. “Length and process of a medical malpractice suit.” http://www.lawfirms.com/resources/medical-malpractice/medical-negligence-lawsuits/length-process.htm September 16, 2013.