Running a 401(k) plan isn’t just about picking a fund lineup and hoping employees save enough for retirement. It’s about process, documentation, and proving that you acted like a prudent fiduciary even when markets misbehave. I always tell plan sponsors the same thing: if the Department of Labor knocked on your door tomorrow, there are five documents you’d better be able to pull out of a drawer without breaking a sweat.
1. Investment Policy Statement (IPS). This is your rulebook. It explains how investments are selected, monitored, and replaced. Without an IPS, every fund change looks random and emotional. With one, you look like a disciplined fiduciary following a repeatable process.
2. Committee Charter and Minutes. If you have a committee—and you should—write down who is on it, what their responsibilities are, and how often they meet. Minutes don’t need to be a novel, but they should show that real conversations happened about fees, performance, and participant needs.
3. Fee Benchmarking Report. “Reasonable fees” isn’t a feeling; it’s a comparison. A current benchmarking report shows you checked the marketplace and didn’t just accept whatever your provider charged because it was easy.
4. 408(b)(2) Service Provider Disclosures. These tell you who is getting paid and how. If you’ve never read them, you’re flying blind. Fiduciary duty requires understanding compensation, not pretending it doesn’t exist.
5. Plan Document and Amendments. This is the constitution of your plan. Operating outside the document is the fastest way to an IRS correction program and a very uncomfortable conversation with ownership.
None of this is glamorous, but retirement plans are built on paperwork the way baseball is built on box scores. You don’t win by accident—you win by keeping records, following a process, and proving you cared. If those five documents aren’t in your drawer, let’s fix that before someone else asks why.
