Alternative Retirement Plan Investment: The Checklist

What are the investment objectives or strategies of the investment?

☐ Yes  ☐ No

Is the investment allowable under any plan documents and investment policy statement (if one exists)?

☐ Yes  ☐ No

Are the goals of the investment consistent with the interests of the plan, and its participants and beneficiaries, considering such aspects as the likelihood of appropriate return, risk, and time horizon?

☐ Yes  ☐ No

Do participants have a level of sophistication that makes it likely they will use the investment option appropriately?

☐ Yes  ☐ No

Should there be any limits to the availability of the investment?

☐ Yes  ☐ No

Will the investment provide information that will adequately inform participants of how it works, how it differs from other investments, the fees and risks involved, and what restrictions apply?

☐ Yes  ☐ No

Will the investment add to the investment diversification already available to plan participants?

☐ Yes  ☐ No

Are the total investment fees, including any management fees and expenses, reasonable?

☐ Yes  ☐ No

Is the manager of the investment acting in a fiduciary capacity?

☐ Yes  ☐ No

Is this a long-term manager and does the manager have a track record of success?

☐ Yes  ☐ No

What is the investment performance history?

☐ Yes  ☐ No

How does this investment compare to other investments with similar features?

☐ Yes  ☐ No

What time horizon should be considered in selecting the investment?

☐ Yes  ☐ No

Does the performance meet requirements under the plan?

☐ Yes  ☐ No

What are the primary risks of the investment or industry?

☐ Yes  ☐ No

Will the investment have sufficient liquidity to handle cash outflows (including hardship distributions, loans, and required minimum distributions)?

☐ Yes  ☐ No

Will that fund option be able to accommodate investments of relatively small amounts over time via payroll deduction?

☐ Yes  ☐ No

Will the investment subject itself to the retirement plan’s qualified domestic relations order (QDRO) and beneficiary procedures (which might require the investment to be split with, respectively, a divorcing spouse or beneficiaries)?

☐ Yes  ☐ No

Is there sufficient liquidity to allow for rollovers and distributions?

☐ Yes  ☐ No

Will the investment be benefit-responsive insofar as subjecting itself to the retirement plan’s QDRO and beneficiary procedures (which might require the investment to be split with, respectively, a divorcing spouse or beneficiaries)?

☐ Yes  ☐ No

Will the investment provide adequate information for the plan administrator to satisfy its reporting obligations, including regular valuations of investments, annual and quarterly fee disclosures (the latter of which must state the fees and expenses that were actually incurred by each participant), and reports of commissions paid?

☐ Yes  ☐ No

Will the investment affect the plan’s annual audit process, the time or cost of conducting an audit, or audit waiver qualifications?

☐ Yes  ☐ No

Is the investment being valued reasonably, and will the valuation be acceptable for annual audit purposes?

☐ Yes  ☐ No

Do any fiduciaries stand to gain (financially or otherwise) if participants select this investment?

☐ Yes  ☐ No

Do any decision-makers or “influencers” have personal funds invested in the investment or stand to earn a commission from the plan investment?

☐ Yes  ☐ No

In looking at the records of the decision, is there sufficient documentation to show that there was a prudent selection process in choosing the investment? (This may include meeting minutes, investment reports, prospectuses, participation agreements, historical return data, participant census information, etc.)

☐ Yes  ☐ No