What a Defensible Fiduciary Process Actually Looks Like for Plan Sponsors
What a Defensible Fiduciary Process Actually Looks Like for Plan Sponsors
Once plan sponsors understand that they are fiduciaries, the next question is almost always the same:
“What does a defensible fiduciary process actually look like in practice?”
The answer isn’t about complexity or perfection.
It’s about consistency, impartiality, and documentation.
A Defensible Process Is About How Decisions Are Made
Fiduciary oversight is not judged by outcomes alone.
Regulators and courts focus on:
How service providers were evaluated
Whether alternatives were considered
How fees and services were assessed
Whether conflicts were identified and managed
Even a good outcome can be challenged if the process behind it is unclear or undocumented.Common Review Cadences Sponsors Use
While every plan is different, many prudent sponsors follow a general framework:
Annual check-ins
High-level review of service quality, issues, and plan changesPeriodic benchmarking (every 2–3 years)
Review fees and services against market peersComprehensive evaluations or RFPs (every 3–5 years)
Deeper review of capabilities, pricing, and alternatives
These timeframes are not rules — they are signals of prudence.
The Core Elements of a Defensible Fiduciary Process
A prudent fiduciary process typically includes:
Regular, objective evaluations of service providers
Fee and service benchmarking against relevant peers
Documented rationale for selection and retention decisions
Clear identification of conflicts of interest
Defined roles and responsibilities for decision-makers
These elements don’t need to be burdensome — but they do need to be deliberate.
Independence Matters More Than Many Sponsors Realize
One of the most common weaknesses in fiduciary processes is overreliance on parties with conflicts of interest.
When evaluations are conducted by:
Incumbent vendors
Brokers compensated by carriers
Advisors with product relationships
…the process can appear biased, even when intentions are good.
Independent, conflict-free review is often what separates a defensible process from a vulnerable one.
Documentation Is Not Bureaucracy — It’s Protection
Documentation is often misunderstood as paperwork for its own sake.
In reality, documentation:
Creates continuity when leadership changes
Provides clarity for boards and committees
Demonstrates prudence during audits or litigation
If a decision cannot be reconstructed from records, it may as well not have happened.
Consistency Over Time Matters
A defensible process is not a one-time event.
Sponsors should be able to demonstrate:
A repeatable review cadence
Periodic reassessment of vendors and fees
Ongoing monitoring, not just initial selection
Consistency shows intent.
One-off reviews do not.
What a Defensible Process Does Not Require
Sponsors often assume they need:
Constant RFPs
Vendor disruption
Internal legal expertise
Perfect outcomes
They don’t.
A defensible process requires:
Thoughtful review
Independent validation
Clear records
Not chaos.
Why Proactive Process Beats Reactive Defense
Once scrutiny begins, options narrow.
Sponsors who have an established process:
Respond faster
Maintain credibility
Reduce financial and reputational damage
Those without one are forced into rushed, expensive remediation.
The Bottom Line for Plan Sponsors
A defensible fiduciary process is not about avoiding relationships or second-guessing every decision.
It’s about being able to say — and prove — that decisions were made:
Objectively
Prudently
In the best interest of plan participants
That standard is achievable — and manageable — with the right framework in place.
More Information you might find interesting…
What It Means to Be a Fiduciary — and Why It Matters More Than Most Plan Sponsors Realize
Why Relying on Non-Fiduciaries Creates Risk — Even When Everyone Is Acting in Good Faith
What a Defensible Fiduciary Process Actually Looks Like for Plan Sponsors
Broker Compensation and Fiduciary Risk: What Plan Sponsors Need to Understand Now
📩 Ready for an independent evaluation that goes beyond fees? Let’s talk.
