Most retirement plans don’t look broken at first glance.
They’ve been around for years. Testing gets done. Vendors send reports. Employees enroll, or at least some of them do. From the outside, everything appears to be functioning.
The problem is that many of the most serious issues inside a qualified plan stay hidden until something forces the question. A failed test. An audit finding. A fee review that raises eyebrows. Or a moment when someone finally asks, “Do we actually know how this plan works, and are we exposed if something goes wrong?”
That’s usually when I get the call.
When I review a qualified retirement plan, I’m not just looking for obvious mistakes. I’m looking for quiet problems that can build over time. Problems that frustrate employees, limit outcomes for highly compensated individuals, and increase fiduciary risk for the company.
There are three areas I always focus on.
Plan design shapes behavior more than people expect
One of the biggest misconceptions I see is that employees will naturally save what they need for retirement if a plan exists. In reality, people anchor their behavior to whatever signal the plan gives them.
A common example is the employer match.
I worked with a company where the plan matched dollar for dollar up to 2%. Almost everyone contributed exactly 2% and stopped. Not because that was enough, but because the match told them that was the finish line.
When we restructured the match so employees had to contribute more to receive the same employer contribution, behavior changed. People saved more, participation improved, and the company’s total match cost stayed the same. That kind of outcome comes from plan design, not from lecturing employees to do better.
Plan design issues also show up in testing. If a plan consistently struggles with non-discrimination testing, that’s often a design problem, not an employee problem. Those issues can usually be corrected, but only if someone is actually paying attention.
Education is not optional, and it is often missing
Most employees do not understand how much they need to save to retire comfortably. They default to the match, enroll once, and never revisit the decision.
If someone needs to be saving closer to 10% of income and they’re only contributing 2%, they’re falling behind every single year. That gap compounds, and by the time it becomes obvious, it’s much harder to fix.
Education matters for outcomes, but it also matters for liability. The Department of Labor expects plan sponsors to do more than distribute packets and check a box. There needs to be a reasonable effort to help employees understand their options, how much to save, and how the plan works.
Fiduciary oversight is where risk quietly builds
Fiduciary responsibility is the area most likely to get ignored until something goes wrong.
A well-run plan should have an investment policy statement that clearly defines how investments are selected, monitored, and replaced. There should be a documented process for reviewing the fund lineup and understanding fees. Providers should be reviewed periodically, at least every few years, to confirm that what you’re paying aligns with the value you’re receiving.
This is not about finding the cheapest option. It’s about knowing what you’re paying for and why.
For plans with more than 100 employees, audits add another layer of complexity. Are they being done on time? Are there findings? Are they cost-effective? I’ve seen situations where audits were delayed or poorly handled, which creates unnecessary exposure.
There are also technical requirements that get missed more often than people realize. For example, plans are required to maintain a fidelity bond equal to 10% of plan assets to protect against fraud. This is different from fiduciary liability insurance, and many plans are either under-bonded or not bonded correctly at all.
Another area that often gets overlooked is what happens during acquisitions. When a company acquires another business, decisions need to be made about whether to assume the existing plan or start fresh. I’ve worked with companies to wall off inherited liability by creating new plans and giving employees the option to roll over, rather than taking on unknown fiduciary risk from a prior employer.
What a plan review actually looks like
When I do a plan review, I’m not conducting an audit. I’m looking for cracks.
That starts with the core documents and reports: the plan document, adoption agreement, Form 5500, employee census, and plan-level reporting that shows participation, contributions, investments, and costs. These materials tell a much clearer story than most people expect.
There are tools that help surface issues quickly, including problems the company may not even know exist. In more than one case, I’ve reviewed plans where leadership believed everything was fine, only to uncover excessive expenses, weak education, or governance gaps that needed attention.
Why I like this work
This allows me to help employees who genuinely don’t know what their plan means or how to use it. I remember early in my own career participating in a 401(k) with no education at all. I made mistakes that could have been avoided if someone had taken the time to explain things.
Helping employees do better while helping employers reduce liability is a win for everyone.
The bottom line
If you haven’t reviewed your qualified retirement plan recently, it doesn’t mean something is wrong. But it does mean you might not know if something is.
A thoughtful plan review can improve employee outcomes, strengthen fiduciary processes, and reduce the likelihood of unpleasant surprises down the road.
If you want a clearer picture of how your plan is really working, let’s talk.
Doug Hepburn is an Investment Advisor Representative of and offering securities and investment advisory services through Cetera Advisors LLC, a broker/dealer and a registered investment advisor, member FINRA, SIPC. Cetera is under separate ownership from any other named entity. Home office address: 508 Elm Avenue, Suite 100, Phoenixville, PA 19460.