There is no such thing as a perfect plan sponsor. Anyone who tells you otherwise is either selling something or has never actually worked inside a retirement plan.
Most plan sponsors are not negligent. They are overwhelmed. They are HR managers wearing five hats, CFOs who inherited a plan they didn’t design, or owners who were told years ago, “Don’t worry, we’ve got this.” And that’s the real problem—someone else always had it, until suddenly no one did.
The retirement industry loves to pretend that sponsors are fully informed decision-makers who knowingly accept risk. In reality, sponsors rely almost entirely on their providers to explain what matters, what has changed, and what can go wrong. When something blows up—late deposits, missed eligibility, bad amendments, broken matches—the postmortem always starts the same way: “We didn’t know.”
And most of the time, that’s true.
The uncomfortable truth for plan providers is this: sponsor mistakes are often provider communication failures. Not because the provider gave bad advice, but because they assumed silence was safer than clarity. They explained the mechanics but not the consequences. They delivered compliance without context. They checked the box and moved on.
ERISA doesn’t reward perfection. It rewards process, prudence, and documentation—but only if someone actually understands what they’re approving. A sponsor who signs blindly isn’t protected, and neither is the provider who let them.
The best plan sponsors I’ve worked with weren’t the smartest or the most sophisticated. They were the ones whose providers took the time to say, “Here’s the risk, here’s the decision, and here’s why it matters.”
The myth of the perfect plan sponsor lets everyone else off the hook. And that’s how problems age quietly—until they don’t.
