You can strengthen your plan governance to manage risks more effectively, protect the organization from liabilities, and position the plan to improve benefits and benefit delivery.

What’s the formula? It involves five best practices. If you aren’t doing one or more of these, start now.

1. Attend to the details — when you’re audited, you’ll be glad you did.

In the past two years, nearly one-third of the U.S. plan sponsors that participated in Willis Towers Watson’s 2016 Retirement Plan Governance Survey, and one-half of participating sponsors with 25,000 or more employees, faced an IRS or DOL audit of one or more of their plans.

If you weren’t among them, your plan could be audited next. So pay attention to details, and keep comprehensive records.

Use detailed process checklists to stay on top of both the frequent, periodic, governance-related chores and the less-frequent tasks.

They’re all necessary; documenting these actions is essential for ensuring and proving compliance. To make sure you cross the t’s and dot the i’s on time, create a map that shows governance-related roles and their corresponding responsibilities with deadlines.

Put the dates for governance-related milestones on an accompanying calendar. And make it a habit to monitor these materials with the frequency they deserve.

Well-crafted documents aligned with plan goals are crucial for strong plan governance. (Photo: Getty)

2. Master the documents — they keep you on the straight and narrow.

Our survey found that only about one-third of defined contribution plan sponsors and one-quarter of defined benefit plan sponsors frequently monitor their compliance with their plan’s documentation.

If you aren’t complying with your documents, ask yourself why. Maybe it’s time to revise them.

As documents explain plan fiduciaries’ duties and prescribe their activities, well-crafted documents aligned with plan goals are crucial for strong plan governance.

And adherence to those documents keeps your plan in compliance with rules and regulations.

3. Know what you’re doing — be trained, stay informed.

Plan officials need ongoing, formal-yet-practical training, including ERISA training, that’s aligned with their plan’s documents and objectives.

According to our survey results, many employers do train plan governance committee members regularly. But about one-third of the survey participants train them only occasionally, and 8% conduct no formal training at all.

If you don’t have a formal training program, start one now. And have a process for keeping fiduciaries updated on market trends and legal developments that could affect your plan.

In addition to continual, disciplined oversight, you need independent, full-blown reviews of your plan periodically. (Photo: Getty)

4. Check your work — because mistakes happen.

With the scrutiny of retirement plans ratcheting up, effective plan oversight is more important than ever.

In addition to continual, disciplined oversight, you need independent, full-blown reviews of your plan periodically — beyond what your plan accountants provide for Form 5500 purposes.

Yet only a bit more than half of surveyed plan sponsors reviewed their plan’s operational compliance in the last two years: 58% of defined contribution plan sponsors and 56% of defined benefit plan sponsors.

If you haven’t done one lately, begin a comprehensive review today. This is the perfect opportunity to ferret out any past mistakes and act to prevent more.

The upside of checking your work now: If you find an error, you’ll have a chance to correct it before a government audit reveals it.

5. Keep tabs on the market — no surprises.

Is your finger on the pulse of market changes? Are you sure your vendors are serving you well as markets evolve?

There’s a lot going on: Rapid adjustments in the markets for retirement plan services and investments, the introduction of new investment share classes and nonmutual fund forms of investments, the consolidation of providers and more.

Have an independent organization review your vendor relationships and conduct fiduciary training — this can help you determine whether your incumbent vendors are keeping you up to date.

Do periodic benchmarking to stay current on fees, terms and other market shifts. And document your benchmarking to better position your fiduciaries against challenges by plan participants and the DOL.

If you’ve been slow to do any of these five things, it’s time to step up your game. These best practices help will help you:

• Manage the potential risks associated with investment volatility, rising benefit costs and compliance issues

• Protect the organization against fiduciary challenges

• Realize opportunities to improve benefits and benefit delivery

You’ll also address an area of growing concern to many employers: shortcomings in employees’ readiness to retire.

Our survey found that over the next two years, retirement benefit adequacy — and its corollary retirement readiness — will be one of the top three areas in investment governance to which plan sponsors will devote resources.

As you tighten up your governance, your employees will improve their chances of being able to retire comfortably and on time.