It’s clear, then, that there’s a problem. In order how to best come up cure for Covid-related leakage, we have to zero in on exactly when the trouble lies.
Tag "401k"
The DOL’s guidance on missing plan participants appears just as effective as its week 2012 Mutual Fund Fee Disclosure Rule. Yes, it’s there, but it has no viability. Still, that doesn’t mean 401k plan sponsors can ignore the issue, even if they have not lost participants.
The challenge is plan sponsors often can’t determine if an account is forgotten until some triggering event. And by that time, it’s too late.
So what if a few very high net savers end up with bigger retirement plans? Good for them. The point is to make it easier for more people to save more.
This week is all about those wayward 401k features that are well beyond their expiration date. Careful, though. In the process, you’ll see what’s garbage to one is a work of art to another.
Well, if we’re thinking outside the box, why not go big? It turns out, retirement planning isn’t just about accumulating sources of future funds.
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.
The root of these broader fiduciary concerns lies within the domain of compliance. Everything derives from what the regulators require, what any DOL audit might look at, and what might pique the interest of class-action attorneys.
Here’s the irony of the tax saving incentive. If it’s wildly successful and leads to very large retirement accounts, the required minimum distributions at retirement may place the now retired employee in a higher tax bracket than the one experienced while working.
You cannot understate the fiduciary aspect of lower fees. Most 401k plan sponsors, and especially those in smaller plans, don’t have the time or expertise to administer their company’s retirement plan. If they skimp on fees, are they also skimping on the fiduciary protection those professionals are supposed to provide?
