401(k) Committee By-Laws

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The purpose of adopting committee by-laws is to create a governance structure and operating rules which guide the decision-making process of committee members. The by-laws need not be voluminous but should contain some basic elements that will help direct the activities of the committee. At a minimum, the by-laws should:

  1. Confirm the scope of authority delegated to the committee;
  2. Describe specific responsibilities to be carried;
  3. Identify the officers, titles, positions, and responsibilities assigned to each role;
  4. Describe how committee members are appointed and replaced; and
  5. Establish the frequency of committee meetings.

Maintaining meeting minutes is arguably the most important form of documentation that a benefit committee can use to demonstrate it has fulfilled its responsibilities under ERISA.  Even if a committee follows a prudent process in making a given decision, the committee will not have a strong defense against a breach of fiduciary duty claim unless it can demonstrate that the process was followed.

Meeting minutes serve as documentation for both internal and external audiences. If the plan sponsor cannot produce minutes for a DOL Auditor or plaintiff’s attorney because no minutes were recorded or the minutes fail to document how decisions were made, it will reflect poorly on the employer’s culture of compliance.