Whether a plan sponsor decides to adopt a 401k IPS remains an open question. It’s not a question that should be treated casually. Every plan situation is different. Plan sponsors therefore must conduct a thorough due diligence to determine what’s best for their plan.
Basic Members
Although we’ve seen a broader acceptance of using an IPS, their use is by no means universal and particularly lacking among smaller employers. Perhaps there’s a realization that, if you don’t get the IPS right, you’ll only increase your liability.
“Surveys show about half of investors don’t know how much they’re paying for advice, and about one in six think they pay nothing.”
When you’re not an expert in an important job that you need done, what do you do?
It appears all but certain the floodgates will soon open wide, unleashing a torrent of trade association sponsored 401k MEPs. If you’re looking for the trigger that will open those floodgates, here’s what you should be paying attention to.
Therein lies the conundrum. In the current environment, it may be far easier to overlook the failure to meet benchmarks with adequate consistency than it is to ignore the du jour ad hoc definition of woke.
Not being able to easily monitor how former employees apply these tools, however, can increase the fiduciary liability of plan sponsors.
“401k Multiple Employer Plans (MEPs) are a solution for the small to mid-sized employer market that will lead to the expansion of retirement plan coverage for America’s workers.”
You can’t do anything about it if you don’t know what the “it” is you need to do something about. It is therefore important for plan sponsors to devote resources that increase employee awareness.
MEPs have the potential to do what state-sponsored plans may not be able to offer – protection under ERISA. That’s in the employees’ best interests. If many embrace this concept, September 30, 2019 may indeed signal the dawn of a new day in retirement saving. Still, due diligence remains an imperative.
