On the second day of the virtual PLANSPONSOR National Conference, benefits and executive compensation partners Michael Rosenbaum and Summer Conley advised plan sponsors to shore up cybersecurity efforts and continue regular benchmarking work during the “Fiduciary Mistakes to Avoid” panel.
Regarding cybersecurity guidance and simulations, Rosenbaum said the “use of appropriate experts could help plan sponsors make the appropriate decisions” with respect to their cybersecurity protocols. “There are secrets that they want to protect. Generally, we see sponsors talk about this in committee meetings,” he added.
Conley explained that one fiduciary duty sponsors need to exercise on a regular basis is benchmarking or conducting due diligence on plan providers on a regular basis, but they shouldn’t stop just there. She noted sponsors must ask, “‘Who else should I benchmark? What else is overlooked?’”
Additionally, Conley said, “They shouldn’t just be focusing on recordkeepers. Rather, they should consider anyone providing services that are being paid for their services. That includes trustees, auditors, investment consultants, actuaries and others. They need to benchmark these providers and select a provider for a reasonable fee — and there is a range of ‘reasonableness’ where that is concerned. That is the key point, not that they should pick the cheapest provider all the time.”
A rule of thumb that sponsors can keep in mind is to keep their eyes and ears open to developments and new services in the industry, Rosenbaum said. In other words, don’t be that plan sponsor who “gets in a five-, six-, 10-year ‘comfort zone,’” he added.