What corporate retirement plan oversight actually involves
Sponsoring a retirement plan for your employees is a fiduciary act. That word means what it sounds like — the company has a legal obligation to act in the participants' best interest when selecting and monitoring the plan. The obligation does not end when the plan is set up. It continues every year the plan operates.
In practice, most corporate retirement plans are set up once and forgotten. The original vendor may have been chosen by a broker who earned a commission on the sale. The fund lineup may include options that charge five or ten times more than equivalent index funds. The plan document may not reflect current law. And the company's officers — who are the plan's fiduciaries by default — may not know they are personally liable for any of it.
The work here is not glamorous. It is a plan audit: fees benchmarked against peers, funds reviewed for cost and performance, vendor terms renegotiated or replaced, fiduciary processes documented, and the plan structure evaluated against the company's current needs. That audit should happen every two to three years. At most companies, it has never happened.
We have reviewed plans at companies with ten employees and companies with three hundred. The pattern is the same: fees higher than they need to be, funds chosen by a vendor with no ongoing accountability, and plan officers who have no idea the personal liability landed on them. Fixing it is rarely dramatic — it is mostly substituting a four-basis-point index fund for a ninety-basis-point active fund and documenting that someone looked.
New Jersey employers should also be aware that the state has enacted a retirement savings mandate — the New Jersey Small Business Retirement Marketplace — requiring employers with twenty-five or more employees who do not offer a qualifying retirement plan to facilitate access to a state-sponsored IRA. Companies that already sponsor a 401(k), 403(b), or other qualified plan are exempt. But companies that believe they are exempt should confirm their plan still qualifies — a plan that was compliant when established can fall out of compliance through neglect, missed amendments, or failure to update the plan document for legislative changes like SECURE 2.0.
What working with us looks like
First meeting — the plan audit
We meet in person with the company's decision-makers and review the existing plan — or, if starting fresh, the company's workforce and budget. We benchmark fees, review the fund lineup, and assess the plan structure against the company's current needs. By the end of the meeting you know what the plan is costing and whether it is working.
Second meeting — the written recommendation
You leave with a written report: plan type recommendation, fee benchmarking results, fund lineup suggestions, and a fiduciary checklist. If the current plan is fine, we say so. If it needs changes, we provide a specific action plan with timelines and provider options.
A note on fit
When this might not be right for you
Corporate retirement plan advising is not for every situation. Some cases where we are not the right fit:
- Companies that want a plan sold and administered by one firm that also manages the investments and earns fees from the funds inside the plan. That is a bundled arrangement — we advise independently.
- Sole proprietors with no employees looking for a solo 401(k). That is a different conversation — simpler and faster.
- Companies that want the cheapest possible plan with no ongoing oversight. A plan without oversight is a fiduciary risk waiting to surface.
- Companies that need a third-party administrator or a recordkeeper and nothing else. We advise on plan structure and investment oversight — we do not administer the plan operationally. For that, we have trusted providers we refer to.
If your company sponsors a retirement plan and nobody has reviewed it in the last three years, that review is overdue.
Frequently asked questions
What is a corporate retirement plan fiduciary?
A fiduciary is anyone who exercises discretionary authority or control over a retirement plan or its assets. In most companies, the officers or directors who selected the plan are fiduciaries by default. They are personally liable for ensuring the plan is operated in the best interest of participants.
How often should a corporate retirement plan be reviewed?
Plan fees, fund selection, and vendor performance should be benchmarked every two to three years at a minimum. Fiduciary best practices include documenting every review. Many plans have never been benchmarked, which exposes the company to liability.
What is the difference between a 401(k) and a profit-sharing plan?
A 401(k) allows employee salary deferrals, often with an employer match. A profit-sharing plan allows only employer contributions, which can vary year to year. Many companies use both — a 401(k) for employee savings and a profit-sharing layer for additional employer contributions.
How much does it cost to administer a corporate 401(k)?
Administration costs vary by provider and plan size but typically include recordkeeping fees, investment management fees, and third-party administrator fees. Total plan costs — including fund expenses — should be benchmarked against similarly sized plans to ensure they are reasonable. A plan with fifteen employees paying ninety basis points in average fund expenses is paying far more than necessary; equivalent index funds cost five to ten basis points. The recordkeeping and TPA fees are often negotiable at any plan size above $1 million in assets, and most sponsors have never asked.
Can a business owner maximize their own savings through a corporate plan?
Yes, but the plan type and structure matter. A 401(k) with profit sharing allows higher total contributions than a 401(k) alone. A defined benefit or cash balance plan can allow substantially more for high-earning owners of small firms. The right structure depends on the owner's income and the workforce demographics.
What is SECURE 2.0 and does it affect our company plan?
SECURE 2.0, enacted in December 2022, made significant changes to employer retirement plans. Key provisions include new automatic enrollment requirements for plans established after December 29, 2022, expanded catch-up contribution limits for participants aged sixty through sixty-three, increased part-time employee eligibility rules, and new credits for small employers establishing plans for the first time. Companies with existing plans should confirm their documents have been updated to reflect these changes. Failure to amend a plan document on time can jeopardize its qualified status.
Do you sell corporate retirement plans?
No. We are fee-only fiduciaries. We advise on plan selection, design, and oversight, but we do not sell plan products, accept commissions from plan vendors, or receive revenue sharing from fund companies. Our fee is paid by you and disclosed in writing.