Managing a Retirement Plan Doesn’t Have to Be a Headache
COVID-19 wreaked havoc on our economy. Customers vanished and supply lines evaporated, as employees adjusted to a new paradigm of working from home. Wild swings in securities markets were a symptom of the pandemic. C-suite executives, who also found themselves working remotely, are still being pulled in multiple directions.
Among the hardest-hit industries have been retail, oil & gas, hospitality and travel. In the past year, we’ve seen top national brands such as J.Crew and Neiman Marcus seeking reorganization under Chapter 11. There were many others.
As C-suite executives seek to hammer out deals with creditors and develop post-bankruptcy business plans, they ignore their retirement plans at their peril. The unprecedented volatility that afflicted most all asset classes in the wake of the pandemic, has challenged many long-held assumptions and industry norms. The task of overseeing a qualified retirement plan is getting more and more complicated and burdensome. Companies that choose to fulfill this task internally, are diverting managerial energy and resources from the vital task of executing revised business strategies. As the investment landscape has become more and more complex over the years, retirement plans have become a distraction from the task at hand: survival.
Executives don’t have to be shackled to these distractions, however. ERISA neither requires, nor mandates, that plan sponsors manage or engage in continuous oversight of their plans. In fact, ERISA allows for enormous flexibility in the management and oversight of retirement plans. There is no requirement in ERISA that corporations or committees of a corporation, serve as the fiduciaries of their plan. So, why does the current model of retirement plan management continue to embroil corporate managers?
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