Common Plan Sponsor Misconceptions

Common Plan Sponsor Misconceptions

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Plan sponsors have to manage many moving parts in their retirement plans. Arranging plan options, managing compliance, increasing participation, educating participants and most importantly, adhering to fiduciary obligations can feel like an overwhelming responsibility. Due to the large amount of work in starting and maintaining their retirement plan, sponsors often overlook certain aspects that may expose them to potential liability.  Additionally, some plan sponsors are unaware of the ongoing fiduciary duties which can result in misconceptions about the plan and its participants. These misconceptions can be costly, and sponsors may find themselves in trouble with the IRS or the Department of Labor.

Here are five common misconceptions plan sponsors have – and why they are likely wrong.

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How Regulation Best Interest Could Impact Non-ERISA 403(b) Plans

How Regulation Best Interest Could Impact Non-ERISA 403(b) Plans

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In April of this year, the Securities Exchange Commission (SEC) proposed a new set of guidelines to better govern relationships between professional financial advisers and broker-dealers and those of their individual clients. These suggestions, collectively dubbed Regulation Best Interest, could reshape the relationships between individual investors and the professionals who advise them by ensuring that a broader swath of those relationships requires the broker-dealer to act in the best interests of the client.

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The Increasing Growth of Fiduciary Advisors to Plan Sponsors

The Increasing Growth of Fiduciary Advisors to Plan Sponsors

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Employer-based retirement plans are a major benefit to employees, especially in today’s job economy where 401(k) or 403(b) plans make up the majority of employee retirement savings. A 2018 survey from the Plan Sponsor Council of America found that 70 percent of companies retain an independent retirement plan advisor, which was 66.8% in the prior year. There are several factors that lead to this growth, such as overseeing the delivery of investment advice to participants by way of registered investment advisors (30.8 percent), certified financial planners (28.8 percent) or third-party web-based providers (20.2 percent). Let’s look at why companies hire plan advisors, why they should care, and tips to find the right advisor.

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How to Gauge Retirement Plan Effectiveness

How to Gauge Retirement Plan Effectiveness

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Return on investment. Compound annual growth rate. Market outperformance. Preservation of principal.  Risk adjusted performance. There’s no shortage of metrics available to retirement investors looking to gauge the success of their portfolio. It can be a bit more challenging – and more qualitative – for plan sponsors to gauge their plan’s overall impact on their organization and their participants’ ability to retire.  It’s not easy to get a good sense of whether the 401(k) or 403(b) plan your institution offers stacks up favorably with employee expectations. With that said, however, it’s essential for sponsors to have a good idea of what makes their plan attractive (or not), how to measure it and the overall impact on employee satisfaction. Here’s how to start tracking your retirement plan – and its effect on the bottom line.

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