The DOLâs guidance on missing plan participants appears just as effective as its week 2012 Mutual Fund Fee Disclosure Rule. Yes, itâs there, but it has no viability. Still, that doesnât mean 401k plan sponsors can ignore the issue, even if they have not lost participants.
Basic Members
The twist is this: The bad news is only a fraction of the people will be able to save $4.3 million for retirement because the average salary is too low. The good news is most people wonât need to save $4.3 million because, thanks to living on a low average salary, they are accustomed to spending far less.
The challenge is plan sponsors often canât determine if an account is forgotten until some triggering event. And by that time, itâs too late.
The antiseptic compliance regime spelled out by the DOL and ERISA has to date defined fiduciary services. Perhaps, if weâre going to consider what is âbeyondâ that sterile definition, we might want to go back to the future. In a sense, rediscovering where âfiduciaryâ initially came from might suggest where it is headed.
âThey can benefit from something more tailored to their unique circumstances, particularly as they are approaching certain key inflection points in their working lives or key financial decisions they have to make or key life events. Therefore, what weâve been seeing in the retirement plan industry is this emphasis on retirement plan services.â
Back then, at least, we knew who wore the white hats and who whore the black hats. Today, thanks to muddled and often conflicting regulations for multiple agencies, everyone is wearing fifty shades of gray.
The key intent of this strategy is to allow freedom to and reward long-term employees who have accumulated the skills the company needs to compete.
Should 401k plans allow participants to take loans from their retirement savings accounts? Is pre-retirement access to 401k assets constructive or destructive?
Still, it seems most financial professionals feel anything that brings people closer to the road towards financial independence should be encouraged.
Overall, nearly 1 in 5 companies still have not adopted auto-enrollment. There are common reasons why companies would not include auto-enrollment in their plans.
