Maximize Plan Committee Meeting Times

Each plan committee meeting that Ellen Lander leads lasts from one to two-and-a-half hours. “I’m often asked, ‘How in the world do you get your clients to sit with you for that long?’” says Lander, a principal in and founder of New Renaissance Benefit Advisors Group LLC in New York City. “We explain to our clients that ERISA [Employee Retirement Income Security Act] is all about having a process, and a process is all about governance,” so a committee should follow a methodical and organized process at all meetings, she says. “If you don’t have an established agenda, I don’t know how you get to all the things you need to consider.”

Here are three strategies for helping a committee follow an efficient process:

1) Focus the discussion topics.

Wintrust Wealth Management does a fiduciary investment review at every committee meeting and also identifies, when a year is about to end, specific additional topics it will discuss at each of the next year’s meetings, says Daniel Peluse, executive director of Wintrust’s Retirement Benefits Advisors division, in Chicago. An adviser will subsequently lead discussion of one or two of these topics—e.g., benefits trends overall and in that company’s sector—at each meeting.

Peluse is asked what he does at meetings to keep the committee’s discussion on track. “Prior to every meeting, we send out an agenda, and we’re looking for feedback if they want to add or remove any topics. We also get the information we’re going to discuss to committee members ahead of time, so they can get their questions ready,” he says. “Then, once we start the meeting, we really drive home that we want to focus on the key topics on the agenda.”

At every meeting, RBA leads a discussion about investment due diligence and gives a quick update on basic plan metrics, such as the current participation rate. “Each quarter we also take a deep dive on a topic, and it’s a different topic every quarter,” Lander says. Those four deep dives are: a demographic breakdown of participation and deferral rates, plus a discussion of trends; investment menu options, including participant allocations and transfer activity between investments; the strategy of the plan’s target-date funds and whether the plan still has the best target-date family for its participant base; and fee benchmarking.

Asked how she and her team keep the committee on topic at a meeting, Lander jokes, “Oh, we’re ballsy.” More seriously, she adds, “Our clients get it: They understand and value governance. They understand that we follow a protocol, and it’s the same every quarter. For new clients, we talk about the process we follow and why we follow it.”

2) Effectively introduce potential changes.

How does an adviser suggest that a committee consider making a significant plan design or investment change? “For us, it’s supplying the data that supports making the change,” Peluse says. “Even more importantly, we talk about work we’ve done with similar clients, and the results. Giving them industry data is relevant to getting the discussion started, and then giving them examples of similar clients moves the discussion forward. Being able to provide real-life, tangible examples of similar companies is what makes clients comfortable with moving forward.”

“Being able to provide real-life, tangible examples of similar companies is what makes clients comfortable with moving forward.”

Brea Dantin, retirement plan adviser and chief operating officer at ProCourse Fiduciary Advisors in Carmel, Indiana, assesses each committee’s overall tolerance for change before launching discussion about specific revisions. “We also want to understand their larger corporate initiatives. We want to make sure we’re not operating in a retirement ‘bubble’ and we’re looking at what is going on holistically with the employer,” she says. “You can talk about, ‘What are your biggest corporate initiatives for the coming year and what do you think will be the biggest hurdles you’ll face?’ This is a conversation that isn’t about looking in the rear-view mirror: It’s about looking through the windshield.”

Dantin mentions a couple of the common initial concerns that committees have about making a major change. “A big one is, if the company has a workforce with a low average hourly wage, they’re often concerned about plan design changes such as starting automatic enrollment. They ask, ‘How are our participants going to react?’” she says. “When you can give the sponsor real-life examples of companies in their area that had 98% acceptance of automatic enrollment and have a lower average hourly wage, that really helps. And you have to be patient as they consider it.”

Also, some clients are very sensitive to potential problems with compliance and litigation, Dantin says. “Even if you talk to them about something you think will be a huge benefit to their employees, they sometimes get twisted up in the possibility of a participant lawsuit,” she says. “If that happens, we want to make sure they understand the difference between settlor functions [such as plan design decisions] and fiduciary functions, and what the risks are of making this change. We’ll point them toward the contacts they have that can help them understand; maybe that’s their outside ERISA attorney, or their fiduciary liability insurance broker. You want to give them time and space to reach out to others and gather information. Sometimes those conversations turn the tide for a committee concerned about making a change.”

3) Encourage balanced debate.

One or two committee members with strong feelings may try to dominate the discussion about making a change. “You’re always going to have a dominant individual in that group,” Peluse says. “Our job as advisers really comes down to educating the committee. We talk about, here’s what to expect if you do this and the benefits and drawbacks. We stay away from trying to drive the committee toward acting one way or the other.”

Lander says RBA does substantial fiduciary training and talks to committees about why dominating personalities are not helpful. Discussions need to be well rounded and from multiple viewpoints. “If you set the expectations—and doing that is your responsibility as the adviser—and you have knowledgeable committee members, then it’s easy to have discussion and debate at meetings,” she says. “Dare I say, it’s also fun. Hearing different viewpoints is very interesting. And seeing a committee ultimately agree on the right answer is gratifying.” 

Art by Kiki Ljung