Contact Us for More Information

Employee Benefit Plan Best Practices

Posted by Corey F. Schechter | Jan 29, 2018 | 0 Comments

Benefits 20manager 20best 20practices

With the new Department of Labor fiduciary rules further pushed back to go into effect on January 1, 2019, plan fiduciaries have more time to review employee benefit plan best practices. Employee benefit plan best practices include a review of who is involved in what role, the plan administrator's responsibilities, and fiduciary duties under ERISA.

Most private employee benefit plans, including retirement and health plans, are subject to the Employee Retirement Income Security Act of 1974 (ERISA). Under ERISA, there is a fiduciary duty for those who manage or control plan assets. This includes plan sponsors, administrators, and trustees.

The plan should identify the plan sponsors, trustees, and administrators, as well as spell out the administrator's duties. Plan administrators are those responsible for administering the benefits plan as a fiduciary. This fiduciary duty requires them to act solely in the interest of plan participants and beneficiaries.

The plan administrator, as an individual or committee, has a number of responsibilities. This includes:

  • Complying with ERISA requirements and federal law;
  • Managing the plan according to plan documents;
  • Following reporting and disclosure requirements;
  • Establishing administrative investment policies;
  • Maintaining plan and participant records;
  • Reviewing benefit claims;
  • Selecting plan investments; and
  • Administering the day-to-day operations of the plan.

Fiduciary responsibilities for an ERISA benefits plan may include limiting expenses to reasonable and necessary costs of administering the plan, diversifying investments, following the terms of the plan, avoiding conflicts of interest, monitoring investment performance, and selecting investment options and providers.

Failure to follow benefit plan best practices may leave a fiduciary personally liable for losses to the plan and result in removal from their duties. Plan administrators should take care to reduce their potential liability for fiduciary breaches. Best practices include:

  • Documenting the administrator's decision-making process to show the basis for making decisions on behalf of the plan.
  • Selecting qualified individuals for any fiduciary committee, with clearly designated areas of responsibility.
  • Regular monitoring and adjustment of investment selections based on the plan goals. As investment performance or costs change, adding or removing investments as necessary.
  • Keeping an eye on costs. Plan expenses must be reasonable and avoid the appearance that there is a conflict of interest. This may mean removing certain investments as costs or fees increase.
  • Carefully review any changes to the plan documents. Any changes must comply with ERISA requirements, including communication and notice requirements. Plan compliance includes making sure investments and administration comply with plan documents as well as state and federal regulatory requirements.
  • Communicate with employees and plan participants about plan eligibility and enrollment deadlines. Automatic enrollment and providing participant access to select investments can increase participation and give plan participants a role in their benefits.

If you have any questions about employee benefit plan best practices and ERISA compliance, Butterfield Schechter LLP is here to help. We are San Diego County's largest firm focusing its law practice on employee benefits. Contact our office today with any questions on how we can help you and your business succeed.

About the Author

Corey F. Schechter

Corey Schechter practices in the areas of Employee Benefits, Employee Stock Ownership Plans, Pension and Profit Sharing Plans, ERISA, ERISA Litigation, Business Law, Qualified Domestic Relations Orders (QDROs), and Employment and Labor Law.


There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

Retirement Plans

We help establish a customized plan that meets regulatory requirements as a tax qualified plan. Following implementation, our attorneys can assist clients and their plan administrator with regular reviews and updates to help with regulatory compliance for the plan's operation, and continued effectiveness in meeting the client's specific goals.


We are dedicated to employee ownership. When you come to us for ESOP services, you receive influential legal counsel who stand beside you to help you stay informed, in compliance, and abreast of the latest developments-all to help you realize your plan goals as fully and effectively as possible.


A QDRO is a specially designed court order that is required for the division of retirement benefits in a family law case. Many family law attorneys do not possess the expertise necessary to divide retirement benefits or stock options upon divorce. We have extensive experience in dividing qualified plans, government plans, IRAs and stock options between the employee spouse and non-employee spouse.

Butterfield Schechter LLP provides the information in this website as a service to its clients and visitors to the site. This website is for information purposes only and is not intended to create, and receipt of it does not constitute, an attorney-client relationship. The information in this website is provided "as is," and while the information in this website is updated periodically, additional facts or future developments may affect subjects contained herein, and no guarantee is given that the information provided is correct, complete, or up-to-date. Seek the advice of professional counsel before acting or relying upon any article, form, or information in this web site. To ensure compliance with the requirements imposed by the United States Treasury and the Internal Revenue Service, we inform you that any federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of: (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing, or recommending to another person any transaction or matter addressed herein. Butterfield Schechter LLP has endeavored to comply with all known legal and ethical requirements in compiling this website. In the event that this communication does not conform with any laws or regulations of any state or country in which it may be received, Butterfield Schechter LLP will not accept legal representation based on this communication from a person in such a state or country. Electronic mail is provided as a convenience in communicating with the attorneys at Butterfield Schechter LLP. Contact by e-mail does not alone create an attorney-client relationship. Please remember Internet e-mail is not secure and messages sent to the firm or any of its employees or attorneys should not contain sensitive or confidential information. Thank you for visiting our site.