As workplace retirement plans continue to become the predominant method that American workers are using to save for retirement, the fiduciary responsibilities of retirement plan committees are becoming more complex, according to SEI.

The majority of the members of plan committees come from the human resources department, and these individuals may not be equipped to assess investments, SEI notes. In addition, they are only offered limited resources when it comes to selecting funds. For these reasons, SEI expects more plan committees will turn to outside resources such as advisers and Employee Retirement Income Security Act (ERISA) attorneys.

SEI surveyed 231 executives who serve on their firm’s retirement plan committee and found that 86% of them are making investment lineup decisions. However, 12% are turning to their finance or treasury department to handle this.

SEI learned that 38% of the members of retirement plan committees come from the human resources department. Thirty-three percent are from finance, 25% are from executive management, and 4% come from the legal or compliance department.

Eighty-four percent of retirement plan committee members do not think their participants will have enough saved if they retire between the ages of 62 and 65. Fifty-two percent think that because 401(k) plans were not initially designed to be people’s primary retirement vehicle, they need to be redesigned.

Ninety-two percent think they have a fiduciary responsibility to offer the best investment options available. Forty-six percent said that “quality of investment options” is the most important factor when selecting funds. Fifty-two percent said avoiding litigation is the committee’s No. 1 priority.

SEI learned that 54% of the executives serving on retirement plan committees have three or fewer resources or staff to oversee the investment management of their plan. Nonetheless, 76% have made a change in their investment lineups in the past year.

Looking out to the next 12 months, 25% plan to consolidate funds, 42% plan to add new asset classes, 37% plan to do a re-enrollment, and 43% plan to add funds to the lineup that will help reduce volatility.

Ninety percent of sponsors offer target-date funds (TDFs) but 37% report that less than one-quarter of their participants use them, and 52% offer managed accounts, but 69% report that less than one-quarter of their participants use them. This indicates that sponsors need to better educate participants about these choices, SEI says.

Sponsors are turning to outside partners for help, with 87% using an investment consultant or adviser.  Sixty-nine percent said their adviser acts as a 3(38) fiduciary. However, SEI says, many of these fiduciaries may only be acting as a 3(21) fiduciary.

In conclusion, SEI says that, in the interest of transparency, more plans are moving away from bundled providers that offer both asset management and recordkeeping. Sponsors also need to review TDFs more thoroughly. And as plans continue to become more complex, it is increasingly in sponsors’ best interest to partner with outside experts.

SEI’s full report can be downloaded here.