Rules are necessary for guiding the administrator in carrying out its duties. The rules must be brought together in a document known as "internal by-laws". Their purpose is to guarantee sound plan administration and especially to avoid errors that could be detrimental. They should be based sound management principles.
If the administrator has followed them, it can prove it has met its obligations.
Whether the administrator is a pension committee or not, it must have internal by-laws.
The internal by-laws include governance rules. If a pension committee is the plan administrator, the rules also cover pension committee operations.
These are the rules to follow when making decisions, monitoring the plan and managing risks. They must cover, at a minimum, the following 5 subjects:
The internal by-laws must provide for measures to be taken in order to train the administrator, regardless of whether the plan is administered by a pension committee.
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