For a small plan sponsor, the threat of class action litigation is the least of your problems! In practice, it is far more probable that your smaller plan will be subjected to audits conducted by the DOL and Internal Revenue Service based on compliance and fiduciary issues. Many of these are errors of omission or failure to retain proper documents.

This Fiduciary Audit File Checklist is intended to be a general guide for assisting 401(k) plan fiduciaries in developing a plan documentation file. We believe that a fiduciary’s primary responsibility should be focused on establishing a prudent investment process, including the setting of investment policy, selecting the professionals to implement the process, and monitoring the results of the process. Given this mandate, it is important that the fiduciary maintain a readily accessible Fiduciary Audit File to demonstrate that the process has been properly established, that the process has been adhered to, and that significant decisions affecting the plan have been adequately documented.