It would be easy for nonprofit management to ignore the requirements associated with employee benefit plans, such as retirement plans. Easy, but very mistaken.
As defined pension plans fall by the wayside and employees become more actively involved in their retirement funding, employers have to be more aware of sophisticated arrangements that come on the market. Even if workers are making investment decisions, employers still have fiduciary responsibility, as well as requirements imposed by the U.S. Department of Labor and the Employee Retirement Income Security Act (ERISA).
During the American Institute of CPAs (AICPA) Not-for-Profit Industry Conference, Ian MacKay of the Employee Benefit Plan Audit Quality Center and Bertha Minnihan of the Moss Adams’ Employee Benefit Plan Group offered advice about governance of employee benefit plans, that is, being aware of plans and what they entail. For example:
Be aware of responsibility and potential liability related to the role of fiduciary;
Identify and document those involved with the plan;
Take on responsibility and awareness of plan-related controls;
Know the importance of a designated body/committee for plan oversight;
Hold regular reviews of investment performance and fees;
Promote internal awareness of specific plan-related issues; and,
Undertake external education concerning industry updates/hot topics.