The top financial concern for most Americans is not having enough money for retirement. This is a real worry for about ⅔ of workers. As a retirement plan sponsor, you can help combat those fears. Sponsoring a retirement plan is a big responsibility. Are you up to the task? Do you feel that you have the knowledge and expertise to design and run a plan that will maximize participant savings? Most plan sponsors don’t. So they hire a retirement consultant.
But not just any retirement consultant will do. The quality of retirement consultant that you hire will have a direct effect on the quality of the plan that you offer to your workers. The retirement consultant that you choose really does matter.
What Does A Retirement Consultant Do?
As the name implies, retirement consultants help plan sponsors with their retirement plans.
They provide objective and knowledgeable guidance, advice, and service. Businesses usually rely heavily on their retirement consultant to guide them in navigating ERISA compliance, understanding their fiduciary responsibility and creating a plan that truly meets the needs of the participants.
Though services vary considerably, there are five key areas of service that most retirement consultants provide. These are:
- Plan governance consulting,
- Plan design consulting,
- Education consulting and assistance,
- Provider consultation, and
- Investment oversight.
Some retirement consultants go beyond those basics to offer more in-depth services. These include gap analysis, investment structure, investment policy statements, and fee benchmarking.
Benefits of A Good Retirement Consultant
A good retirement consultant understands their fiduciary responsibility. They understand what it means to take on personal liability for your retirement plan, and they act with the required diligence and care. Not only do they understand and fulfill their duties, but they assist you in navigating your duties as well. They help you limit your risk by educating you and guiding you regarding your fiduciary responsibility.
Quality retirement consultants can do this because they are fully versed in ERISA regulations and stay abreast of any changes in the law. They’re aware of what is going on with legislation, litigation, and regulation and how it relates to your specific plan. They will help you stay on top of things and keep your plan compliant.
Not only will a good retirement consultant help you keep your plan up-to-date, they will help you build the right plan for your company from the start. Retirement plans are not one-size-fits-all employee benefit solutions. If you’ve never worked with a good retirement consultant, you won’t appreciate the detail they go into to make sure that your plan fits your employee needs and cost parameters.
Should your company have a cash balance plan, safe harbor, or defined benefit plan? There are huge differences in the variety of retirement plans available. Choosing the right kind of plan can make a difference of thousands of dollars in retirement savings, especially for owners and executives. A great retirement consultant will take the time to understand your company’s needs and craft a unique plan to meet them.
How to Choose A Retirement Consultant
As a plan sponsor, finding the right retirement consultant to work with has real, tangible consequences for you, your company and employees. The hiring of a retirement consultant is part of your legal fiduciary duty and must be taken seriously. It is worth the time and effort to make sure you hire the right one.
First, you need to determine what services you need. Once you have that established, you can submit a Request for Proposal to various consultants. These will allow you to analyze and compare your different options.
Here are some suggestions for finding the right retirement consultant for your plan:
- Ask other business owners and professionals for referrals
- Validate the retirement consultant’s credentials
- Verify their knowledge and expertise
- Ask for recommendations from the consultant’s current clients
- Check to see if claims have been filed against them (whether through insurance, litigation, IRS, or DOL)
How We Can Help
If you would like more information about what retirement consultants do and if your plan needs one, we can help. Give us a call today at (312) 973-4911 or email info@planpilot.com to set up a time to get together. We would be happy to discuss the needs of your specific plan and the impact that your choice of retirement consultant will have.
Related Posts
Why Plan Sponsors Should Hire a Retirement Plan Consultant - Learn why plan sponsors choose to work with a retirement plan consultant, as well as a few of the questions you'll want to ask if… ...Read More
What Plan Sponsors Should Know About the Plan Document - Why is the retirement plan document so important, and what elements should be included in your organization's plan document? ...Read More
Evaluating Your Plan’s Recordkeeper - Learn more about the role a plan recordkeeper plays and some of the factors plan sponsors should consider when choosing and evaluating a recordkeeper. ...Read More