Retirement plan sponsors must be able to put their hands on lots of records, ideally without hours or days lost searching. What email thread was that important committee decision documented in? Who’s got the most updated benchmark analysis of plan fees? Cryptocurrency as an option—what exactly did the advisor advise? Pension plan professionals point out that for fiduciaries, information chaos is not just frustrating, it is a real liability vis a vis plan governance and operations. Read on for encouragement to make the leap into modernization.
Time to Modernize
As a former retirement plan sponsor, Will Hansen, now the Executive Director at Plan Sponsor Council of America, and the Chief Government Affairs Officer at American Retirement Association, knows a thing or two about the frustrations of information chaos:
Reflecting back on my time as a plan sponsor, I remember spending 6 hours searching through filing cabinets and email folders for a single plan amendment. I found it eventually—buried in an email thread from three employees ago. That frustrating experience reminded me why so many plan sponsors are quietly struggling with what I call “the retirement plan operational nightmare.”…The reality of modern plan governance looks something like this:
- Decades of paperwork scattered across filing drawers, computer files, emails, and multiple stakeholders (HR, advisors, recordkeepers)
- Constant regulatory changes from PPA to SECURE 1.0 to SECURE 2.0, each creating new compliance requirements
- Rising litigation risks that demand better documentation and faster access to plan information
- Personnel turnover that takes institutional knowledge out the door
The most obvious consequence of information chaos is the time lost, but as Hansen goes on to observe, the damage goes a lot deeper: “Committee members spending hours preparing for meetings instead of making strategic decisions. New personnel facing months-long learning curves. Routine document searches blocking real progress. And perhaps most concerning of all—unclear fiduciary responsibilities that put everyone at risk.” Indeed, for most plan sponsors, it’s way past time to stop striving toward a better approach to filing emails (or paper) as a fix for what Hansen points to as the heart of the issue: “Retirement plan governance has become impossibly complex while our tools have stayed frustratingly simple.”
Toward real progress to bring retirement plans up to speed, the Plan Sponsor Council of America (PSCA) has partnered with Knowa to provide “a single platform that speaks the language of retirement plan governance, understands the complexities of fiduciary responsibility, and delivers practical solutions that work in the real world of committee meetings, audit preparations, and regulatory compliance.” Hansen encourages retirement plan sponsors to visit www.knowa.co for a demo, as they further explore how the hub makes more possible, including:
- Every plan document is instantly searchable with AI-powered precision
- Meeting minutes are completed in minutes, not days
- New committee members get effective onboarding from Day 1
- PSCA’s educational content and best practices are integrated right alongside your plan-specific information
Good To Know
The Plan Sponsor Council of America’s national conference in 2025 included insights into how “high-profile retirement plan lawsuits—including forfeiture allocation, excessive fee, pension risk transfer, and ESG-related litigation” are impacting the ERISA compliance landscape for all businesses, including smaller ones. In particular, small business owners need to be more alert to the fact that as ERISA litigation has “steadily increased since 2020,” so too has the focus on “smaller plans, excessive
fees, and fiduciary breaches.” Indeed, the precedence set through ERISA litigation against the fiduciaries of large retirement plans, has made copy cat cases impacting smaller plans more viable. Use of AI to mine plan data also makes it easier and faster to identify fiduciary red flags, by simply using the publically available data from Form 5500.
Keep in mind that as a retirement plan sponsor, you are automatically an ERISA fiduciary, and can be held personally liable for:
- Compliance: Do operations adhere to the plan document, and government regulations? Are you up to date with all cybersecurity protocols?
- Decisions: Do you have the right advisor, and investment options?
- Cost control: Are the plan fees reasonable and services solid? Have you monitored?
Are you ready to defend yourself against allegations of a fiduciary breach? Even if you have done nothing wrong, securing ERISA legal defense is likely to cost you upwards of $600–per hour, as the case drags out in the courtroom for months or even years. That’s why, for small business owners, the most important defense against the catastrophic costs of ERISA claims is Fiduciary Liability Insurance. Colonial Surety Company offers this crucial layer of financial protection to retirement plan sponsors from businesses of all sizes. With an annual fee of less than the cost of just one hour with an ERISA defense expert, you’ll be protected with:
- Fiduciary Liability Insurance providing up to $1,000,000 for defense and penalties if you are faced with alleged or actual breaches of fiduciary duty.
- Basic Cybersecurity Coverage for the business and plan, which includes expert response services to curtail damage after an incident.
Get protected now: Fiduciary+ Cyber Liability Insurance
Serving customers since 1930, Colonial Surety Company is the trusted source for the pension industry to secure legally required ERISA bonds, fiduciary liability insurance and cyber-liability insurance. We help safeguard plan sponsors, pension professionals and financial advisors — and keep their businesses compliant — with pain-free, efficient, and friendly service every time. Colonial Surety Company is rated “A Excellent” by A.M. Best Company, US Treasury listed and in business all across the country.