Avoid Litigation With Attention To Common ‘Red Flags'

Any size retirement plan can run into serious trouble when sponsors are not careful. With some planning, however, your qualified retirement plan can take steps to avoid ERISA litigation. A reminder of the most common "red flags" leading to litigation might be helpful.

Reasonable Expenses

Although plan sponsors cannot assure consistently strong investment performance, you can, and must, ensure that expenses are reasonable.

When your plan's investment portfolios are performing well, it is easy to pay less attention to the recordkeeping costs and investment management fees. However, when performance is subpar, out-of-line expenses stick out like the proverbial sore thumb. Make sure you schedule regular, independent reviews of your plan expenses and fees every three to five years as part of your overall due diligence efforts.