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The three areas nonprofits should focus on in retirement plan reviews

Matt Lemay

It’s no secret that nonprofit organizations across the U.S. played a crucial role during the COVID-19 pandemic, serving our communities in every way imaginable. However, with resources already spread thin, many of the routine, annual reviews that these organizations had with their vendor partners were sidelined. This included retirement plan reviews.

Several years later, many nonprofits still haven’t resumed these meetings. It’s understandable that they don’t always feel like a priority, especially as nonprofits remain busier than ever, but these reviews can do a lot of good for organizations. Here are three areas to focus on in your next review with a retirement plan advisor that can benefit your operation.

Utilizing your plan as a talent tool

Amid low unemployment rates across the country, the nonprofit sector has experienced workforce shortages in recent years, with many organizations struggling to fill open positions1. In this environment, how can nonprofits compete against larger, for-profit employers? Recruiting and retaining top-level talent is a complex task for any organization, but especially for nonprofits. There are strategic and financial benefits to using a 401(k) or 403(b) to recruit and retain workers.

Part of your next review should include information on how similar nonprofits are enhancing their retirement plans to stay in line with today’s workforce standards. From there, you can figure out how to boost what your organization offers.

Understanding investment performance

Fund performance is relative, so it’s important to understand how your plan’s funds are doing compared to peers. Your retirement advisor can help you make sense of the numbers and know what to look at.

As part of this process, make sure to review an investment monitoring report with your advisor on an annual basis to discuss any underperforming funds. It’s important for your organization to understand why these funds are remaining in your investment lineup for employees. Be sure to document this information and save it in your records. Both steps are a part of your fiduciary responsibility.

Benchmarking fees

Fees should also be analyzed relative to peer organizations. If you haven’t reviewed your fees in a while, it’s possible that they aren’t in alignment with current averages. It’s a good idea to benchmark your plan at least every three years, though an annual process is preferred.

Make sure your advisor helps you understand all of the fees related to your plan as an organization, as well as any fees that your employees are paying. This is also part of your fiduciary responsibility.

If your organization’s retirement plan reviews have fallen onto the backburner, it’s a good time to pick them back up to ensure you’re hitting the mark and meeting the needs of employees. A retirement plan advisor can help you get started and keep you on track in the future.


Matt Lemay

About Matt Lemay

Matt Lemay has the expertise to create a retirement plan solution that meets your unique goals. He provides disciplined, high-quality investment management, customized participant education and training, and client-specific plan review and consultation for businesses seeking to optimize their retirement plans. By building long-term client relationships based on prudence, responsibility and trust, he helps individuals and organizations establish and meet their retirement benefit goals. Matt earned a bachelor’s degree in business from Bethel University in St. Paul, Minnesota. Matt is involved with Eagle Brook Church in White Bear Lake, Minneso...

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