Here’s the real conundrum faced by 401k plan sponsors: They realize they don’t have the expertise to administer the plan. So, what do they do? It’s only natural they do seek outside help for their retirement plan. The trouble is, not all third parties are created equal. But does the average plan sponsor know this?
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Not only do pooled plans reduced the administrative burden, but they can also reduce the fiduciary liability for 401k plan sponsors. If you’re not constantly looking over your shoulder, you can spend more time with your nose to the grindstone.
This week we’ll be focusing on those favorite features as judged by the retirement plan professionals we interviewed. Don’t be surprised if over the next few weeks you discover that one provider’s treasure is another provider’s trash.
Should the platform offer ESG doesn’t necessarily mean good news for the 401k plan sponsor. Including ESG funds might introduce other risks.
If you think the web of fiduciary duties is complex in a 401k plan that focuses on getting employees to save for retirement, imagine how much more intricate it becomes if the plan also has to cater to retired employees.
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?
Familiarity may breed contempt, but it also makes you sloppy. Do you know plan sponsors that have forgotten they need to address these matters?
Here things get a little familiar for companies with pre-existing stand-alone 401k plans (but may need to be discovered by those without plans).
If plan sponsors assume things can return to the pre-Covid normal, they risk exasperating existing problems. They’re there and cannot be ignored.
Nonetheless, there is a way to short-circuit this time-frame. You can do it, but you’ve got to really want to do it.
