He also reveals the greatest misconception regarding MEPs, what the SECURE Act really did, and when we might begin to see the mass media start paying attention.
Basic Members
Since the plan sponsor tends to rely on third party service providers (usually the recordkeeper) to maintain and operate these web-based gateways, this should be a significant factor when deciding which vendor to select.
The Investment Policy Statement is a legal plan document. It needs to be treated accordingly. This means to deliberate it with diligence before adopting it. Even when it is adopted, it must be regularly inspected and revised as needed.
There are many different types of plans, particularly when plan sponsors pick a 3(21) or 3(38) adviser. Which service provider arrangement a plan sponsor chooses impacts how the IPS will be constructed – and how the relevant parties contribute to that draft.
“As far as adopting employers, I would recommend an ERISA attorney because an MEP isn’t the right fit and fiduciary solution for every plan sponsor.”
Including these will make 401k plans safer for plan sponsors and more successful for plan participants.
Unlike a generic vendor agreement, the IPS is a formal plan policy document that defines the parameters between the plan and relevant vendors. This is why it can also be a terrible trap.
It’s important to remember that the 401k MEP is just a vehicle. Whether they truly meet the objective of employees saving more for retirement and doing so effectively and efficiently comes down to execution.
Perhaps, just as plan sponsors have developed onboarding programs for new hires when it comes to saving for retirement, maybe they should add “unboarding” programs as a bookend for those nearing retirement.
The Decade’s Top 5 All-Time Most Popular 401k Plan Sponsor and Fiduciary “Must-Read” Articles
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