When it comes to the compliance risks surrounding retirement plans, companies are "tackling some issues reactively rather than proactively," according to a new survey by auditor Towers Watson. In fact, just one quarter of executives overseeing benefit plans conduct periodic regulatory compliance reviews."While most employers are concerned with compliance, many are not taking all the steps available to manage the financial, organizational and other risks created by ineffective plan governance," states the firm's "New Governance Landscape" report. With the recent uptick in related lawsuits, retirement plan governance requires oversight of decision-making processes, vendor monitoring and compliance with the many laws, regulations and disclosure requirements.
Respondents, despite their inaction in conducting reviews, do seem to be realizing the severity of the threat. Forty percent expect to spend more time on retirement plan governance during the next two years, devoting their efforts towards benefit costs (77%) and regulatory complexity (73%).
"It's surprising that a majority of companies seem to be content with the amount of time they spend on governance issues," states the report. "On the other hand, respondents who expect to spend more time on plan governance seem to recognize the evolving governance landscape."