The retirement industry loves the phrase best practices. It sounds proactive, responsible, and professional. In reality, most “best practices” have very little to do with improving plan outcomes and everything to do with surviving a deposition.
Look closely and you’ll see it. Committees that meet because the calendar says they should, not because there’s anything meaningful to discuss. Investment reviews filled with charts no one reads. Fee benchmarking reports generated annually, acknowledged, and filed away like a receipt you keep just in case someone asks later.
None of this is inherently bad. The problem is that best practices have become a substitute for judgment.
Too often, providers design processes not to help sponsors make better decisions, but to create a record that says, we were there. The goal isn’t clarity—it’s plausible deniability. If something goes wrong, the defense isn’t “this was the right call,” it’s “we followed industry standards.”
Courts are getting smarter about this. They’re less impressed by volume and more interested in substance. Did the committee understand what it was approving? Were alternatives actually discussed? Did anyone explain why a decision mattered, or was it just presented as the next step in a prepackaged workflow?
True best practices don’t exist to be uniform. They exist to be thoughtful. A three-page memo that explains a risk and a recommendation is often more valuable than a 60-page report no one can summarize.
Providers need to stop confusing activity with prudence. Governance is not theater. Documentation is not protection if it reflects rubber-stamping rather than real deliberation.
The irony is that litigation avoidance works best when it isn’t the point. When providers focus on helping sponsors understand risk, make informed decisions, and document why something was done—not just that it was done—the file writes itself.
That’s not flashy. It doesn’t scale well. But it’s what actually holds up when someone finally opens the file.
