The retirement plan business has a memory problem.<\/p>\n
Something goes wrong. Everyone gets upset. Meetings are held. Procedures are changed. New safeguards are created. Everyone promises that the mistake will never happen again.<\/p>\n
Five years later, nobody remembers why the new procedure exists.<\/p>\n
That is when somebody says, \u201cWhy are we wasting time doing this?\u201d<\/p>\n
Then they eliminate the procedure.<\/p>\n
Six months later, the same mistake happens again.<\/p>\n
It happens more often than people realize because retirement plan providers are pretty good at documenting what employees are supposed to do, but they aren\u2019t always good at documenting why they are supposed to do it.<\/p>\n
There is usually a story behind an unusual procedure.<\/p>\n
Maybe a client had a payroll problem. Maybe an employer failed to tell the TPA about a related company. Maybe an allocation was calculated incorrectly. Maybe a distribution was approved without the proper review. Someone created an extra step because something bad happened.<\/p>\n
Years later, the employees who remember that mistake may be gone.<\/p>\n
That is why providers need to preserve institutional memory.<\/p>\n
When you create an important new procedure, document why you created it. You don\u2019t need a six-page memorandum. A short explanation stating what happened, what risk was identified, and why the safeguard was added may be enough.<\/p>\n
Otherwise, somebody eventually looks at the procedure without knowing its history and decides it is unnecessary.<\/p>\n
History has value in the retirement plan business because many compliance mistakes are repeat mistakes.<\/p>\n
Technology can store every document you\u2019ve ever created, but technology cannot preserve a lesson that nobody bothered to write down.<\/p>\n
Providers spend a lot of time trying to avoid future mistakes.<\/p>\n
Sometimes the easiest way to avoid them is simply remembering the mistakes you already made.<\/p>\n
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