Offering your employees a 401(k) retirement plan is one tactic that can be used to attract and retain top-quality employees. Of course, just offering a plan is not enough. You also have to promote and manage your fiduciary responsibilities once the plan is in place. We’ve listed some of the top mistakes that plan sponsors make with their 401(k) plans, along with a few articles that might be of interest to you:

Failing to Understand Your Fiduciary Responsibility

You or the person you select to carry out these responsibilities must comply with the standards provided under the Employee Retirement Income Security Act of 1974 (ERISA). This federal law protects private-sector pension plans. The law's standards include ensuring that you act prudently and solely in the interest of the plan's participants and beneficiaries.

Understanding fees and expenses is important in providing for the services necessary for your plan's operation. This responsibility is ongoing. After careful evaluation during the initial selection, the plan's fees and expenses should be monitored to determine whether they continue to be reasonable. While ERISA does not set a specific level of fees, it does require that fees charged to a plan be "reasonable."

Failing to Educate Plan Participants

Plan disclosure documents keep participants informed about the basics of plan operation, alert them to changes in the plan’s structure and operations, and provide them a chance to make decisions and take timely action with respect to their accounts.

Failing to Review Plans Annually

Once you have a plan in place, review it annually, quarterly or as often as needed. You'll want to ensure that your company's current investment lineup is consistent with established plan goals and objectives. The key, says Ledbetter, is to identify strengths and weaknesses of the investment program and make changes accordingly.

You might also consider forming an investment committee comprised of key staff members such as a chief financial officer or hiring someone to specifically oversee your company's 401(k).

This is only a partial list of mistakes made by plan sponsors. If you'd like to learn more about other pitfalls to avoid, please contact the REDW Benefits team to learn about the strategies you can put into place.