A new legal filing could cause fiduciaries to rethink plan vendors’ use of participant data and these vendors’ cross-selling other financial products to plan participants.
Adding a New Investment Option to a Retirement Plan
A retirement savings plan, such as a 401(k) or 403(b), is a valuable employee retention and recruitment benefit. But sponsoring one takes a great deal of work and employees do not always fully understand the plan’s value or utilize its benefits. Meanwhile, you need to make sure the plan investment options are sound, diverse, and low cost while meeting participant needs. That means developing an investment policy statement and monitoring process that:
- provides ongoing vigilance,
- regularly reviews participant and fund behavior, and
- considers new investment options.
How to Boost Plan Participation Rates
When asked why they did not participate in their employer’s 401(k) plan, 40 percent of respondents to a survey said they did not have time to enroll. Nearly an equal percent said they did not earn enough, and 19 percent cited the hassle of enrollment as the reason for non-participation. These concerns, as well as other factors, could be affecting the participation and retirement readiness of the employees of your organization. Here are a few ways you can address these common concerns and increase plan participation rates.
Plan Sponsor Risk Management Strategies
Retirement plan risks cannot be avoided, but they can be managed in order to minimize their impact on plan participants and sponsors. Employers and sponsors that offer defined contribution (DC) plans have a fiduciary responsibility to measure, manage and mitigate the various factors and risks that could affect those plans.
Protecting a retirement savings plan and its assets requires effective governance. The need was particularly intensified in recent years by several employee class action lawsuits scrutinizing employer governance of 401(k) and other defined contribution plans (e.g., 403(b) and 457).
How Do I Select the Right Audit Firm?
Since the auditing changes regarding 403(b) plans changed in 2009, it is essential for plan sponsors to know what to look for when selecting an independent auditor for their retirement plan. Once you understand whether or not your retirement plan requires an audit and what type of audit is most appropriate for your situation, it’s time to find an auditing firm that meets your needs. It’s important to select a trustworthy and experienced audit firm.