Clearly, you wouldn’t pay more for 2 apples if you could get 3 for the same price, but would you pay more to get 2 oranges instead?
Tag "retirement"
Once a person enters retirement, the number of scenarios proliferate. Unless the plan sponsor is a financial professional, itâs going to be a challenge to quickly comprehend all these options.
This isnât to say younger employees should be left out of this type of education altogether. They shouldnât. Itâs important the message is drip, drip, dripped from the beginning of the onboarding sequence.
Before you scorn the use of badges, remember, the company match is the ultimate badge. If you meet a minimum savings goal, the company awards you a âbadgeâ of a matching contribution.
The mistaken promise of participation may have an all-too-familiar ring to corporate retirement plan veterans.
Before you start to panic, take a deep breath and relax. The retirement savings industry is an aircraft carrier. It canât turn on a dime.
“That is one of the key weaknesses of the SECâs Reg BI. It allows brokers to claim they are working in an investorâs best interest without being held to a legal duty of loyalty”
If plan sponsors want to alleviate retirement angst among plan participants, they need to ensure they provide full transparency regarding factors that extend beyond the plan. Plan sponsors have an obligation to explain their retirement benefits within the context of these outside factors.
Despite the better intentions of finance professors a generation ago, the market regularly fails the efficiency test. The scary reality is not a question of what degree of market inefficiency exists, itâs that market inefficiency exists at all. And that can harm investors.
The good news is 401k plan sponsors donât need to treat this as a solo act. Theyâve already got a team of hired hands to help them.
