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Seven Fiduciary Traps to Avoid: #7 – Having No or Sloppy Documentation around Plan Decision Making

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Over the last several weeks, in this series of seven blogs we have covered the most obvious challenges that Plan Administrators must avoid to ensure a successful, thriving 401k Plan.

The final obstacle reminds all fiduciaries of the importance of maintaining good records. In order for the Plan to be well-run, based on good decision making, there must be records in place that document the progress of the Plan in order to demonstrate their compliance. Plan Administrators are entrusted to make decisions that are in the best interest of the participants.  However, without documentation and notes chronicling their activities, there is no way to judge whether they are upholding this responsibility.  Current and accurate documents form a permanent record of the decision making process, thereby enabling Administrators to look back to previous documented decisions to determine their reliability and effectiveness.

Robert Lawton, retirement plan consultant, writes, “Are you following prudent processes when making decisions? There is no way to know when looking back at prior decisions unless you documented it. Not following prudent decision-making processes and procedures can result in plan disqualification, fiduciary breaches, lawsuits and personal liability. ”       

This dire warning reinforces the importance of preventing Trap #7 from occurring. Instead, be sure to have the documentation you need to support informed decision making.

To learn more about these seven fiduciary traps, please join us on Tuesday, January 30, 2018 for the next Sobel & Co. Employee Benefit Plan group’s webinar. If you have any questions, email Liz Harper at To register for the lunch and the webinar beginning at 12:30, please RSVP to