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The problem with committees


Many articles talking about good retirement plan practices will talk about the need for employers to set up retirement plan committees to manage their 401(k) plan.


While I agree that there needs to be some sort of process in place to run the plan, there are many instances when committee are a hindrance when they become a bureaucracy. I once joked that as an associate attorney at a semi-prestigious that if the managing attorney wanted to kill an idea, she’d create a committee for it. Recently, someone at synagogue told me that they created a committee to improve the members’ experience and there are 37 people on the committee.


A committee to handle a 401(k) plan has to be put in place to actually run the plan, it can’t be created as another roadblock in getting the plan run in a prudent manner. If it becomes a bureaucracy and is paralyzed from acting in the best interests of plan participants, then the committees become part of the problem and not the solution.

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