Pension and Retirement Plan Consulting
What this domain tests
Pension and retirement plan consulting questions test the advisory judgment behind plan decisions: how to benchmark a plan, run a provider RFP, set a fiduciary governance calendar, and improve participant outcomes without creating new compliance risk. Expect scenarios involving a plan committee, a recordkeeper, an investment adviser, and a sponsor with turnover or acquisition issues.
Core concepts
- Governance: a committee charter, named fiduciaries, documented meeting minutes, and an annual calendar for reviews, fee benchmarking, and compliance testing.
- Plan design benchmarking: compare participation, deferral rates, match utilization, balance adequacy, and leakage against peer data, not just cost.
- Provider oversight: evaluate recordkeeping, trustee/custody, advice, and investment fees; require 408(b)(2) disclosures and compare direct and indirect compensation.
- Retirement readiness: use auto-enrollment, auto-escalation, re-enrollment, and match design to lift participation and deferral rates; measure results with a scorecard.
Worked example
A sponsor has 800 employees, 55% 401(k) participation, a 3% average deferral, and a 3% match. The committee wants 70% participation and a 6% deferral. A consultant recommends automatic enrollment at 6%, auto-escalation of 1% per year to 10%, a re-enrollment, and changing the match to 100% of the first 4% with a true-up. Reasoning: automatic features raise participation, the match now rewards deferrals up to 4%, and the true-up prevents forfeiture of match for uneven payroll deferrals. The committee should document the peer benchmarking, cost impact, and expected outcomes.
Traps
Do not present a design change as a purely business decision when it affects fiduciary duties; do not treat the recordkeeper as a fiduciary without analysis; do not ignore 404a-5 participant fee disclosures; and do not recommend a provider without a documented RFP and fee comparison.