By Mark Olsen, Managing Director at PlanPILOT
Demand for Outsourced Chief Investment Officers (OCIO) has skyrocketed in recent years, and a growing number of retirement plan sponsors are looking to free up internal resources by outsourcing this role. At PlanPILOT, we offer many services to help clients find the right OCIO for their needs, including a proprietary database of educational content that can be utilized throughout the outsourcing process.
By Mark Olsen, Managing Director at PlanPILOT
We’ve observed a growing demand for defined contribution (DC) plan management. This article offers insight into our experience and provides considerations designed to equip committees to evaluate which DC services might be right for their unique plan needs.
Plan sponsors have the tremendous responsibility of being stewards of DC plan assets on behalf of their participants. The baseline premise of DC plan oversight—making decisions for the sole benefit of plan participants—is a significant undertaking in and of itself. Adding to the level of responsibility in no small measure is the increased fiduciary scrutiny of legislators and regulators, as well as the ongoing evolution of the retirement landscape. It is no wonder that nearly 59% of plan sponsors use an ERISA 3(21) advisor, a fiduciary consultant or advisor who makes investment recommendations in plan oversight. (1) Further, more than two-thirds of plan sponsors are looking to change advisors. (2)
Our work with plan sponsors has confirmed that DC Plan Consultant services are right for many committees and plans. In addition, sponsors already leveraging the assistance of a consultant or advisor may need help determining if their current partnership is bringing them value based on their unique needs and circumstances. We offer a series of themes below to help committees reflect on their own plan facts and circumstances.
While this outline is certainly not exhaustive, it does offer a starting point for committees. We believe taking the time to consider these factors can be informative in assessing a DC Plan Consultant partner and selecting one that will enhance your plan’s oversight activities.
It is productive for committees to take an opportunity to reflect on the timeline and effectiveness of their plan oversight activities.
The economic environment is overloaded with a series of fundamental shifts, each requiring an increasing need for time and attention.
The retirement landscape is evolving rapidly given the extensive role DC plans play in retirement outcomes of today’s workforce. The range of topics in need of study is extensive, but necessary to ensure participant needs are most effectively met.
The COVID-19 pandemic has increased the complexity of our world, resulting in significant changes to our workforce. Committee structures are not insulated from these trends; thus it is important to take this into consideration any impact to your plan’s oversight.
The complexity of DC plan oversight and the increasing demand of time and attention from committees cannot be underestimated. The expansion of services, solutions, and offerings can be overwhelming to committee members with full-time commitments and competing priorities. What’s more, the critical nature of DC plans providing successful retirement outcomes is more important than ever. Some committees are hitting on all cylinders and not in need of additional help. However, there are many committees who may benefit from adding or even changing their existing DC Plan Consultant to help them better accomplish their plan goals and objectives. Taking time to assess your plan’s unique needs and circumstances and whether additional help is needed is time well spent.
Do you need help evaluating which DC services would be the best fit for your plan? At PlanPILOT, we strive to deliver comprehensive advisory services that help you meet and exceed your fiduciary responsibilities by providing you with the proper risk management solutions and independent advice you need. If this sounds like the type of partnership you’re looking for, call us at (312) 973-4913 or email mark.olsen@PlanPILOT.com to set up an introductory meeting. We look forward to hearing from you!
Mark Olsen is the managing director at PlanPILOT, an independent retirement plan consulting firm headquartered in Chicago. PlanPILOT delivers comprehensive retirement plan advisory services to 401(k) and 403(b) plan sponsors. Drawing on more than two decades of experience, Mark provides institutional retirement plan consulting to 401(k), 403(b), and defined benefit plans. His specialties include plan governance, investment searches, investment monitoring, and plan oversight. Mark is recognized as a leader in the industry and speaks at national conferences, including those organized by Pensions & Investments, Stable Value Investment Association, and CUPA-HR.
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(1) Deloitte 2019 Defined Contribution Benchmarking Survey Report
(2) Fidelity 2021 Plan Sponsor Attitudes Survey
https://institutional.fidelity.com/app/item/RD_13569_26306.html
By Mark Olsen, Managing Director at PlanPILOT
Contrary to popular belief, an employer-sponsored retirement plan is more than just a benefit for employees; there are actually many ways the plan sponsor can benefit as well. From attracting and retaining key employees to tax-deductible contributions and expenses, a retirement plan is a benefit that can work well for everyone involved.
Despite the benefits, it can be difficult to sort through all the information out there and truly know which plan is best for you and your business. It doesn’t have to be this way! We at PlanPILOT can help you sort through the many retirement options available to plan sponsors. In this guide, we’ll explore the pros and cons of the safe harbor 401(k) and how to decide if it’s the right option for you.
A safe harbor 401(k) is named after the “safe harbor” provision in the tax code which states certain alternative conduct will be considered compliant for a particular rule or requirement. In this case, a safe harbor 401(k) plan will be exempt from annual nondiscrimination testing as long as the employer makes fully vested contributions to every eligible employee’s account. (1)
Plan sponsors can choose which type of safe harbor plan they would like to adopt, which provides flexibility in finding a plan that fits your needs.
There are many benefits to a safe harbor 401(k) plan, including:
While the benefits of a safe harbor 401(k) are enticing, it’s important to keep the cons in mind as well:
Choosing the right retirement plan offering, whether it’s a traditional 401(k) or a safe harbor plan, comes down to several factors, including employee count and demographic, participation levels, company cash flow, previous compliance issues (if any), and desired plan design.
At PlanPILOT, we help retirement plan sponsors sort through these factors to determine the right choice for their employees and their companies. If you are considering a safe harbor 401(k) and would like more information on the pros and cons, call us at (312) 973-4913 or email mark.olsen@PlanPILOT.com.
Mark Olsen is the managing director at PlanPILOT, an independent retirement plan consulting firm headquartered in Chicago. PlanPILOT delivers comprehensive retirement plan advisory services to 401(k) and 403(b) plan sponsors. Drawing on more than two decades of experience, Mark provides institutional retirement plan consulting to 401(k), 403(b), and defined benefit plans. His specialties include plan governance, investment searches, investment monitoring, and plan oversight. Mark is recognized as a leader in the industry and speaks at national conferences, including those organized by Pensions & Investments, Stable Value Investment Association, and CUPA-HR.
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(1) https://www.irs.gov/retirement-plans/plan-sponsor/401k-plan-overview
(2) https://www.paychex.com/articles/employee-benefits/is-a-safe-harbor-401k-right-for-you
(3) https://www.paychex.com/articles/employee-benefits/is-a-safe-harbor-401k-right-for-you
(4) https://www.investopedia.com/terms/q/qualified-automatic-contribution-arrangements-qacas.asp
(5) https://www.irs.gov/retirement-plans/plan-sponsor/401k-plan-overview
(6) https://www.irs.gov/retirement-plans/notice-requirement-for-a-safe-harbor-401k-or-401m-plan
By Mark Olsen, Managing Director at PlanPILOT
As the world continues to recover from the effects of the COVID-19 pandemic, there has been an increasing movement in American society to look beyond just ourselves and consider the impact we’re making on the people and the world around us. This has gone beyond just individuals and has permeated corporate expectations as well.
By Mark Olsen, Managing Director at PlanPILOT
After a three-year rally, the financial markets have been down for seven straight days, marking their worst slide since the pandemic decline in March of 2020. (1) Monday’s market dip put the S&P 500 down over 10%, which is officially called a “correction” on Wall Street. (2)
In addition to the stock market decline, inflation has been causing concerns. Because inflation is reaching 40-year highs, it is expected that the Federal Reserve will begin raising interest rates in the spring, which could potentially slow the economy. (3)
Investors are understandably nervous about their investments and their purchasing power, and it’s likely your employees are worried about their retirement goals. Here’s how to support them and help them keep a level head and avoid financial mistakes.