You cannot understate the fiduciary aspect of lower fees. Most 401k plan sponsors, and especially those in smaller plans, donât have the time or expertise to administer their companyâs retirement plan. If they skimp on fees, are they also skimping on the fiduciary protection those professionals are supposed to provide?
Tag "Jeff Coons"
Nobodyâs perfect. Itâs unfair to expect recordkeepers to be. Everyone makes mistakesâeven recordkeepers. The problem is what happens when a mistake occurs.
How do you solve, for example, the problem of integration between the payroll software and the 401k recordkeeperâs website?
A few years ago, this might have been classified as a common âmistake.â Again, âmistakeâ is in quotes because this is less an issue for certain plans (usually small firms or particular industries) than others.
But this rookie mistake doesnât bypass veteran plan sponsors. If theyâve grown too complacent with their plan, they may wake up one day to find out theyâve got a dinosaur on their hands.
Retirees should think for themselves and what alternatives they have regarding their retirement assets. These arenât the same as they were when they were working.
If youâre a fiduciary of the acquiring plan, you want to make sure youâre not burdened with any unknown liabilities. If youâre a fiduciary of the acquired plan, you want to make sure the merger process doesnât introduce new liabilities.
The decision to retain and service company retirees appears (at first blush at least) to be a no-brainer. But that includes a very important assumption.