Conducting your annual plan review - DWS Investments

InvestmentsBecause suitable investments are an essential element of a retirement plan offering, the selection andmonitoring of investment options is one of the most important responsibilities of the plan sponsor.FOLLOW A THREE-STEPPROCESS TO DETERMINE SUITABLEINVESTMENT OPTIONSStep 1 | SelectStep 2 | MonitorStep 3 | DocumentStep 2 | MonitorThe plan’s Investment Committee should formallyreview fund characteristics and the performance ofeach investment option at least annually. In manycases, semiannual or quarterly reviews of investmentoptions may be prudent.THE PLAN’S INVESTMENT COMMITTEETo meet their fiduciary responsibilities, plan sponsorsfrequently establish an Investment Committee thatis distinct from the Retirement Plan Committee. TheRetirement Plan Committee should review key areasof the plan, while the Investment Committee shouldfocus on reviewing the plan’s investment options.Having some members serve on both committees,however, is possible and sometimes advisable.The primary responsibilities of the InvestmentCommittee are limited to the selection, monitoringand evaluation of the plan’s investment options. Inpractice, the Investment Committee first establishesthe Investment Policy Statement and makes its initialselection of the investment options. Thereafter, thecommittee conducts periodic reviews and evaluatesthe plan’s investment options on an ongoing basis,while documenting its findings and decisions.Step 3 | DocumentWithout exception, every review by the InvestmentCommittee should be maintained in a written record,including minutes of any meetings. The record shouldalso include all decisions made by the committee,such as the rationale for placing or removing optionson the watch list, and the next steps to implementthese decisions. Meeting minutes should be madeavailable to the Retirement Plan Committee and theorganization’s Board of Directors. Documentation iskey to demonstrating that your organization followed aprudent process to meet its fiduciary obligations.Step 1 | SelectOnce your plan’s Investment Committee has beenestablished, and an Investment Policy Statementhas been approved, the committee should selectinvestment options that correspond to the criteriaspecified by the statement itself.10 » Conducting your annual plan review