Of course, to really answer the question of post-retirement middle class stability, we have to understand what “middle class” means. Luckily, there are folks who collect data, which helps with this definition.
Tag "plan sponsor"
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.
Overall, nearly 1 in 5 companies still have not adopted auto-enrollment. There are common reasons why companies would not include auto-enrollment in their plans.
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.
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.
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?
Retirement plan sponsors may also benefit from teaching entrepreneurial skills to their employees. Such lessons could also provide employees with opportunities to begin to practice what they learned directly for their current employer.
Not only do you need to watch the place that holds all the money, you need to watch the pipeline that feeds the money there.
Documentation, due diligence, and other formal compliance matters are critical to reducing the fiduciary liability of 401k plan sponsors. But ultimately, they are responsible for safeguarding the assets of plan participants.
There is an out, of course, but that might eliminate the so-called “institutional pricing” advantage former employees have for staying in the plan in the first place.
