Plan sponsors can benefit from motivated employees, and the 401k plan is a tool to achieve this motivation. What precisely can plan sponsors offer in addition to the usual company match to make their 401k plan more enticing, more attractive, more motivating?
Tag "Due Diligence"
Isn’t it ironic that the very people who 401k plans were created to benefit have decided it’s easier to ignore the maze than to constructively participate. Allowing the 401k to evolve up to today’s technology will solve many problems.
The current economic setting only heightens fiduciary liability. Last year, the DOL logged more than 4.5 corrected violations per business day. With aggressive litigators using technology to sniff out these violators and others, what’s a 401k plan sponsor to do?
$16.5 million is a large price to pay for disclosure and due diligence a plan fiduciary can simply and consistently address. This may be the easiest action a 401k plan fiduciary to take to prevent the camel from sticking his nose under the tent.
Awful returns suggest investors should have shunned equities during the century’s first decade. Or do they? A closer examination reveals a surprising conclusion, one that might upset the fastest growing segment of the financial industry.
Plan sponsors want a more robust way to analyze. This technique may have saved 401k investors significantly last year.
The wildness of the equity markets and the uncertainty of our economic environment appears to be opening the eyes of the typical fiduciary to more exotic investments. The practical implication may mean greater potential liability.
The active investing vs. passive investing argument has become passé. Perhaps we may be nearing a new consensus where it’s no longer active OR passive, but active AND passive.
Investors have decided to flee two asset classes: stocks, perhaps because of their dramatic gains in the last six months; and cash, perhaps because of historically low interest rates. In either case, investors have signaled their lack of confidence in a near term recovery in the American economy.
Unless and until we can break the momentum of intertwined conflicts-of-interest, the greatest legacy we’ll leave our grandchildren’s children may be an outstanding bill to pay for spiraling public employee retirement benefits.
