We are extremely grateful for the opportunity to write this series of blogs on a very important issue in the world of community pharmacy. Having a pharmacy 401k and the fiduciary responsibility that goes along with it is a tremendous responsibility that should not be taken lightly. Our goal with this blog series was to simplify what fiduciary responsibility means in the eyes of the people that oversee it. We hope you have enjoyed reading them and have found them extremely useful. Now, let's look at what you can do right now to create a culture focused on meeting the requirements of being a fiduciary.

The first thing that everyone needs to understand is it is not as difficult as you think to create a culture focused on satisfying your 401k fiduciary responsibility. There are a few simple things that you can do each and every year that will go a long way to satisfying your requirements. These will have positive rippling effects for all the participants in the plan (which is the ultimate goal of having a 401k plan in the first place).

There are 5 things we recommend you do immediately if you are not doing them already (if you are doing any of these, then only implement the ones that you are not currently doing):

1. Contact your advisor/broker and ask him if he shares fiduciary responsibility with you for your 401k plan - If he or she answers no, then ask if he or she is willing to accept fiduciary responsibility on the plan. If he or she answers no again, then consider looking for an advisor that will accept this responsibility.
2. Ask your advisor/broker (once they have accepted fiduciary responsibility) to agree to two meetings every year with the plan participants - the first will be a general plan update and the second will be one on one meetings with the participants to make sure they know how to use the plan specifically for their individual retirement needs.
3. Schedule a meeting with your advisor/broker to do a thorough plan review - this should be something you do every year to make sure the plan is still applicable to the needs of the employees. This will allow you to determine if the participants are using the plan or any portion of the plan, and if you need to make any changes to the plan.
4. Review the fee disclosure documents that were provided to you by the plan service providers - if you didn't receive these, then contact the plan providers and ask for copies. If they will not provide them to you, then look for other service providers. You need to know the total fees for the plan so you can benchmark them against other plans the same size if you area. This is the only way to know if you are paying excessive fees for the plan. You can always ask your advisor/broker to provide a benchmark report so you can compare your plan to others.
5. Review the investment options in the plan - you want to make sure that you have low cost, passively managed index fund options in your plan. These tend to be significantly lower cost and provide better diversification than actively managed funds (these two things typically help the participants accumulate the most money possible and avoid significant losses which is your most important fiduciary responsibility). You also want to make sure there are portfolio options from which to choose. It typically is easier for participants to understand portfolios (agressive, moderate, risk-averse) rather than individual investment options.

These 5 things will go a very long way in helping you satisfy your fiduciary responsibility. Also, please make sre that everything you do and every meeting you have regarding the plan is documented. You will want to be able to prove you have this culture of compliance if anyone important asks. If you have any questions or would like to discuss any of these, please feel free to contact one of our advisors. Thank you again for this opportunity.