PANC 2012: Quarterly Review

A good quarterly review starts with an effective meeting agenda, panelists told attendees of the 2012 PLANADVISER National Conference.

This agenda should include a legislative update, economic update, investment review, plan administration review and plan roadmap. The quarterly meeting is a great time to discuss these issues in depth, said Greg Cimmino, managing director at Institutional Investment Consulting.

For the legislative update, it is no surprise that panelists noted 408(b)(2) and 404(a)(5) fee disclosure regulations, which went into effect July 1 and August 30, respectively. The Department of Labor (DOL) website remains a good source for reading about these updates, Cimmino added.

An economic update should involve looking at indexes and analyzing what has been driving the market during this period, said Sean Laird, institutional sales, Wells Fargo Advantage Funds. Jobs and housing remain the top two issues for the economy, he added.

Plan administration should also be reviewed during the quarterly meeting. Benchmarking against similar plans and reviewing the plan design is a good idea, said Paul Temple, vice president, national sales manager, DCIO at OppenheimerFunds. “These plan design issues help set the stage for participants’ success measures,” he said.

Plan advisers should also have available the previous plan review to demonstrate follow-up and results achieved since the last review, Temple said. 


“I think a quarterly review is a good time to look at the service agreement,” Temple said. Advisers and sponsors can discuss whether the agreement has been followed and if there is a need for changes to that agreement because of factors like legislative changes, a reduction of employees or an acquisition.

Plan advisers can also help sponsors look for potential asset allocation issues, such as high-cash positions in which inflation is insidious, as well as a domestic investing bias that can result in missed return opportunities. Participants may have a lack of knowledge about market performance and a misconception of risk, Temple said.

For example, they may misunderstand global versus international funds  only 7% of defined contribution (DC) assets are invested in international equity funds, and 1% are invested in global equity funds.  

Plan sponsors must be alert for asset allocation models that detract from participants’ success, Temple said.

Quarterly reviews are also a good time for plan advisers to educate sponsors on rate of return, Temple continued. “Rate of return I think is something plan sponsors really need to pay attention to,” he added.

The last part of the quarterly review agenda is the plan roadmap. “Just like the agenda, it’s something that changes all the time,” Cimmino said. His company also combines all four quarterly reviews for an annual, which he referred to jokingly as the “roadmap on steroids.”

When performing a quarterly review, panelists agreed that it is vital to document the meeting minutes. Some committees do not think the meeting minutes are important, but Cimmino stressed that the documentation is crucial to protect the plan fiduciary as well as prepare for the next meeting. “It makes it easier and quicker to prepare for your next quarterly meeting,” he said.