For Financial Professionals in the US

Plan Advisors: Read This Before Your Next Investment Committee Meeting

Ben Rizzuto, CFP®, CRPS®

Ben Rizzuto, CFP®, CRPS®

Wealth Strategist

May 17, 2022
6 minute read

The retirement industry is evolving at a rapid pace. To help plan advisors and sponsors stay informed of the latest trends and developments that could impact plans and participants, Retirement Director Ben Rizzuto outlines five items to consider adding to their next investment committee meeting agenda.

A productive investment committee meeting can accomplish several things. It can serve as a way station in the investment due diligence process, provide an opportunity to review past decisions and reinforce the value you provide as a plan advisor.

Along with that, an investment committee meeting should be a time to consider new ideas and update members on any changes that could impact their ongoing and increasing fiduciary duties. If you’re looking for a resource to guide you, our Top DC Trends and Developments report can help you create an agenda that gets investment committee members thinking and talking about key themes and events in the retirement space. Following are five items from our most recent report to consider adding to your next meeting agenda.

  1. Whose responsibility is plan cybersecurity?

Applied Industrial Technologies adopted the stance that cybersecurity is something that should be focused on at all levels of a company. They took the very personal approach of calling or emailing participants (depending on the value of their 401(k) accounts) to remind them to set up two-factor authentication on their accounts. This outreach helped decrease the number of $50,000+ accounts without this security measure in place from 57 to 4. Additionally, after the campaign, the largest account without this extra layer of security went from over $1 million to less than $78,000.

The lesson here is that everyone is responsible for the cybersecurity of plan assets and information. The results of the company’s campaign also highlight how important a personal approach can be, whether it’s encouraging participants to activate two-factor authentication or update the beneficiary designations on their accounts.

  1. What are other plan sponsors focused on?

A number of questions and discussion topics can be found by looking at what other plan sponsors are (or are not) doing. For example, 51% of 401(k) plan sponsors offer participants one-on-one meetings with financial professionals/planners.1 Research has shown that this helps participants feel more confident and implement better financial habits, so it’s worth considering whether more plans should offer this type of support.2

Another recent DC survey shows that only 12% and 11% of retirement plans, respectively, offer high-yield fixed income or real estate investments in their plan lineups.3 This finding raises two questions: First, with more and more participants looking to generate higher income or a better total return from their fixed income allocation, especially as they age, might high yield or other types of fixed income investments be warranted in the plan lineup? And second, with inflation hitting its highest level in decades, and considering the fact that real estate has been shown to provide a significant hedge against inflation while offering diversification benefits to equity and fixed income allocations, might it make sense to provide a real estate investment option in the plan? Both of these questions deserve to be considered by plan sponsors, especially as they view their duties through the lens of the best interests of participants.

  1. SECURE Act 2.0 Update

The Securing a Strong Retirement Act of 2021 (aka, The SECURE Act 2.0) passed out of the U.S. House of Representatives late last year has significantly increased the likelihood that we will see significant changes in the retirement industry this year. (I wrote a blog post outlining key provisions from the bill, and we also have a full presentation available if plan sponsors are interested.) It’s important to understand how these potential changes may affect plans and plan administration. More specifically, if passed, matching contributions could be made in both pre-tax and after-tax dollars. Plan sponsors could also provide matching retirement account contributions for student loan payments made by participants. Both changes would require planning and operational reviews/updates.

In addition to SECURE 2.0, there are several other retirement-related bills winding their ways through the halls of Congress. Should these be reconciled, it would lead to changes in what is voted on and actually lands in the laps of plan sponsors. Therefore it’s important to get ahead of these possible changes and discuss with your investment committee how they might affect plans and participants.

  1. Crypto(k)

While many of us wouldn’t have thought we would need to worry about this subject anytime soon, for better or worse, that day has come. In its Compliance Assistance Release No. 2022-01, the Department of Labor (DOL) provided guidance and encouraged “extreme caution” with regard to cryptocurrency investments being added to plan menus. They pointed to the volatile and speculative nature of these investments, the custodial and recordkeeping concerns, and the unstable regulatory environment within which they currently function.

The DOL’s release was soon followed by news that Fidelity would offer access to bitcoin to plans on its platform. And as we highlighted last quarter in our 4Q 2021 Top DC Trends report, Australian Superannuation providers are also considering the addition of crypto investments in their plan menus. Plus, don’t forget the fact that the most recent Super Bowl was nicknamed the “Crypto Bowl” due to the significant amount of commercial time bought by companies such as FTX, Coinbase and The publicity led to a 279% increase in crypto app downloads.4

If nothing else, all of this means that plan sponsors should at least start thinking about how they want to answer the question of whether crypto should be part of a plan’s investment menu. Will they allow participants to invest, only do so in the brokerage window, or not at all? Whatever the answer, know that the question has been raised and won’t be going away anytime soon.

  1. Northwestern Goes to Washington

The class action lawsuit against Northwestern University and its retirement plan fiduciaries was heard by the Supreme Court (SCOTUS) in early 2022. While some expected a seismic shift to occur in the retirement industry following this hearing, the SCOTUS simply remanded the case back down to a lower court. Still, there are two ideas that came from the court’s decision that are worth reviewing and reminding plan sponsors of.

First, the SCOTUS alluded to the Tibble v Edison case and the idea that plan sponsors have a “continuing duty to monitor (and possibly remove) investments.” Second, the justices noted that this duty covers all the investments in a plan menu. That includes a target-date fund series that may have millions of dollars invested all the way down to an emerging market bond fund, for example, that may have only thousands of dollars of participants’ assets in it. (I recently recorded a podcast on how this decision, as well as other trends, may affect how plan menus are created.)

Overall, this case serves as a valuable reminder of a plan sponsor’s duties as well as the importance of having an ongoing investment review process in place – one that is followed, documented and understood by each and every member of the investment committee.

Those were just five ideas, but there are several others outlined in our Top DC Trends and Developments guide. Whatever you choose to discuss during your upcoming investment committee meetings, the rate of change in the retirement plan industry is clearly brisk. That’s why it is so important for plan sponsors and investment committee members to ensure they are staying informed of all the changes taking place that could impact their plans and participants.


1 2021 PLANSPONSOR Benchmarking Survey.
2 “Financial advisor use, life events, and the relationship with beneficial intentions.” Janus Henderson Investors and Kansas State University, Financial Services Review, 2022.
3 NEPC Defined Contribution Plan Trends and Fee Survey, February 2022.
4 “Super Bowl ads boosted crypto app downloads by 279%, led by Coinbase.” TechCrunch, February 17, 2022.