As with many things, hands-on instruction is generally the best way to achieve this, especially if you make it into an engaging workshop that’s all about the employee and the employee’s dreams, not about the plan.
Tag "plan sponsor"
There’s a fear that those rushing to promote their own PEPs are merely trying to return to the bundle service provider environment the industry evolved away from more than a decade ago. This makes due diligence all the more important.
More sophisticated plan participants who can afford to hire their own adviser. They don’t ask more from the plan. They ask for less, in hopes of gaining more control over their own destiny. For a variety of reasons, this isn’t as easy as some participants would like it to be.
Just as these changes come bearing down, so, too, does a need for greater hand holding. Pressures within the provider industry, however, appear to be reducing the number of available hands.
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.
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?
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