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Investment Monitoring & Reporting (IM&R)

For employer-plan sponsors that may be using a product platform that limits access to a single management company, the need to demonstrate fiduciary prudence is paramount.  Thereto, when a fiduciary chooses a product that inherently limits the available investment alternatives, the need to demonstrate prudent plan governance becomes a defensive necessity.

Nevertheless, the selection of such products is not imprudent – so long as the decision can be backed-up by documentation that demonstrates fiduciary diligence.  Therefore, the combination of an Investment Policy Statement (IPS) and Investment Selection & Review Procedures (ISRP) documents can provide a logical decision framework with regard to the plan’s designated investment options.

For instance, the ISRP would set forth a prudent process by which investment alternatives are initially screened and periodically evaluated.   It would describe methods that are specific, measurable, applicable, results-oriented and time-based (i.e., SMART) – using both quantitative and qualitative metrics that protect fiduciaries from making decisions that could be viewed as being arbitrary or compulsive.  The most common examples of such metrics are:

However, in order to demonstrate ongoing fiduciary diligence and prudence, these metrics would need to be tracked and reported; whereby they could enable the plan fiduciary to make fact-based decisions.  This is exactly what the Fi401k Investment Monitoring & Reporting service would provide.

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