This doesn’t mean you shoot haphazardly for the stars when you can have the moon. After all, you’ve got to know your limitations. Seeking unreachable goals will only make your retirement seem hollow and pointless.
Tag "plan sponsor"
There’s a perverse incentive working here, however. The more aggressive a plan sponsor gets in terms of promoting “financial wellness,” the more likely that plan sponsor will accidentally cross some compliance line.
There’s not a sin in listening to radio shows sponsored by those selling gold and silver. It’s quite another thing to actually act on their “recommendation.”
If you’re a fiduciary of the acquiring plan, you want to make sure you’re not burdened with any unknown liabilities. If you’re a fiduciary of the acquired plan, you want to make sure the merger process doesn’t introduce new liabilities.
What would it take to realize the fiduciary liability of overtly using “risk tolerance” metrics? And what can 401k plan sponsors do about it?
Beyond the usual gestation period, here are some specific “trigger points” which plan sponsors have reacted to that have accelerated their decision to move into a PEP?
How do we design and administer retirement plans?
It’s not necessarily something that can be done at the flick of a switch, but it can be baked into the process.
It’s not just plan sponsors and plan participants that need convincing. The entire retirement plan infrastructure must also get on board. That doesn’t mean the hurdles can’t be overcome.
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.
