As recessions become an inevitable part of the economic cycle, the responsibility of ERISA fiduciaries and 401k plan sponsors is clear. For plan sponsors, the answer lies in a proactive, hands-on approach. It’s about continuously reviewing plan design, investing in technology, and fostering a culture of financial literacy among participants.
Tag "plan participant"
If you look at headlines in the retirement industry trade press, rarely does a week go by when you don’t see an article lamenting the low retirement savings numbers. How do we change this?
Think of the third party as the food truck in the parking lot. Employees will see it and decide for themselves whether to engage with it.
The central role of the recordkeeper can create reverberations with other providers should the plan sponsor attempt to change recordkeepers. Any hiccup in the employees’ ability to manage their retirement assets can cause problems for plan sponsors.
Plan sponsors ought naturally to know how the plan addresses the needs of their business, but do they really know how to tweak the plan to improve outcomes?
In the spirit of the season, one might even think of this as “tricking” employees to save. Plans sponsors are already using these tricks.
Participation is one thing. It’s critical that retirement savers build on the momentum of participation and use that to increase the amount of dollars that get contributed to their article. How can plan sponsors facilitate this?
How strong an argument is there for auto-enrollment? Remember, the key feature of the 2006 Pension Protection Act was to encourage auto-enrollment. The SECURE Act has even stronger language.
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.
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.
