In today’s ever-changing regulatory environment, there is increasing pressure on retirement plan sponsors (from the DOL) and their plan advisors (from the SEC) to address conflicts of interest. The ultimate goal of the new guidelines is to protect your retirement plan participants. More specifically, the DOL and SEC want your employees to receive unbiased advice and to be protected from paying unreasonable fees.
Sponsors know too well that a lot of planning and consideration goes into the design and maintenance of a retirement plan. But much of that hard work is futile without employee participation. Most employees understand the benefit of saving for retirement, and many are willing to invest funds in their employer’s program. However, they may lack basic understanding of how retirement plans work and may not be confident in selecting investment options on their own. Employees need to understand the benefits of the plan and how to use it in order to recognize its value. A robust employee education program can play a significant role in improving plan participation rates and will reinforce the value of the plan to employees.
Changing 401(k) providers takes time and can be costly. But if your current plan isn’t serving the administrators or participants well, a change is necessary. Before embarking on the process of changing a plan provider, evaluate your options carefully to avoid costly surprises and common errors in selection.
As 2018 comes to a close, plan sponsors will want to make sure they understand the current landscape in the retirement plan industry along with potential concerns they may face for the coming year. With more scrutiny over fiduciary roles, it is important to be pro-active and actionable. However, many sponsors don’t realize that there are greater responsibilities beyond setting up and maintaining the retirement plan program. We have outlined the common concerns for 2019 that plan sponsors share regarding their defined contribution plans.
Retirement plans can be a great benefit for drawing and retaining employees. However, is your retirement plan deemed attractive to current and potential employees? How does it compare to other employers you consider peers? An attractive DC plan does not happen by chance – it requires thoughtful plan design. If you craft a plan prudently and with their retirement in sight, it will be beneficial to both your company and your participants. We have helped many plan sponsors with their plan design and observed the main attributes that make a successful retirement plan program.