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).
The Importance Of Fiduciary Training
What does it mean to be a member of your company’s retirement plan committee? It probably means that you are intelligent and dependable and your CEO values your contributions. Your company leadership believes you are trustworthy, enough so to give you control over something as important as their retirement plan. It also means that you are now a fiduciary. Being a fiduciary is a legal responsibility that you automatically take on when you become a committee member. However, do you and the other committee members even know what a fiduciary is? Read on to learn key factors that are typically included in fiduciary training.
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