Although not legally required by ERISA, a retirement plan committee charter is a very important document for plan governance which may help fiduciaries avoid potential liabilities. Committee Charters are one effective way to “evidence” intent of prudent plan management. Having a charter is a “best practice” all plan sponsors should seriously consider.

The primary purpose of a committee charter is to document overall plan governance. It is not dissimilar to how your Investment Policy Statement (IPS) acts as a “roadmap” for managing your plan investments.