If we liken the “5 Critical Topics” to the skeleton and sinew of a plan sponsor’s fiduciary obligation, the “meat and potatoes” topics can be described as its soft underbelly. It is within the routines of these topics that plan sponsors live most dangerously. What are these next two topics and why is it important plan sponsors to dig deep into them rather than simply “read the headlines”?
Plan Sponsors
The Meat and Potatoes Topics of 401k Plan Sponsor Training: Fiduciary Education Curriculum (Part II)
These are fundamental in nature. They are necessary prerequisites for 401k plan sponsors to fully inculcate themselves with more complex topics.
With the final dust comfortably settling on this year’s tax season, we can know begin to put together the pieces of this new reality that may have plan sponsors and their service providers rethinking their long-held strategies.
There’s no question 401k plan sponsors know they need to up their game when it comes to employee education programs. According to one study, 80% of education programs on 401k offerings for employees are ineffective. Plan sponsors today seek solutions to better engage employees.
The Tax Cuts and Jobs Act preserved the sanctity of the treasured retirement contribution deduction – it even made it more important – but it also did a few things that might surprise some business owners.
A good fiduciary needs to see through the hype and base decisions solely on matters of import. This isn’t as easy as it sounds. For one thing, hype, like humor, works because it’s based on truth. This mantle of credibility is just enough to lead the fiduciary astray.
It’s safer to assume you don’t know everything – and here’s a list that begins to define that everything.
What if you were told the best way to calm your nerves was to be worried? Here are 7 reasons why this might be true.
If it is true the fear of loss motivates people more than the offer of a gain, then the traditional 401k company match framework is designed improperly. Currently, employees are promised a reward for contributing in their 401k plan. Think of this as the carrot urging people to save for their retirement. What if, instead of using a carrot, plan sponsors reframe the “match” in terms of a stick?
With the introduction of the concept of anchoring, Tversky and Kahneman opened the door to a new way of thinking about and addressing the financial decision-making process. For more than four decades, subsequent research has expanded upon their idea. Yet, plan sponsors and participants continue to remain uninformed of the dangers of anchoring.
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