Don’t Dismiss Documentation Duties

John Iekel

Exercising fiduciary duty entails a variety of functions—including maintaining and periodically reviewing documents and documentation, a recent blog entry reminds. 

Documentation means more than just keeping and maintaining documents, writes Robert Reilly, Audit Partner at EisnerAmper in the firm’s blog.

In overseeing plan operations and fulfilling fiduciary duties, Reily says, “many critical decisions are made that impact the plan and its participants,” which he adds highlights the importance of keeping written minutes of meetings at which decisions are made. This serves to not only keep a record of decisions, but also as a demonstration of prudent care in running the plan and protecting participants. 

Document maintenance is also key, Reilly stresses, reminding that plan operations are based on plan documents. 

Key to Compliance

Plan amendments and meeting minutes are “vital for documenting adherence with ERISA and demonstrating meeting fiduciary obligations under ERISA,” writes Reilly, adding that they also provide auditors with information necessary for a plan audit. He argues that maintaining plan documents and minutes and providing them early to auditors will make audits smoother and more efficient.

Action Steps 

Reilly suggests steps that plan managers can take regarding documentation: 

• Be familiar with plan documents and amendments—particularly when they are drawn up by a third-party service provider.
• Periodically review plan documents to make sure they are current. 
• Monitor the plan continually to make sure that the plan documents incorporate amendments required under new laws and regulations. 
• If plan documents need to be updated to be in compliance with new and revised laws and regulations, make sure that they are drafted and finalized in a timely manner.  
• When restating plan documents, compare the prior version to the new to make sure that only intended changes have been made to the provisions. 
• And, he says, remember that: 
• Understanding and following plan terms is critical to plan governance and avoiding mistakes in plan operation.
• When restating plan documents, it’s easy to check the wrong box—and that can unintentionally change plan provisions.