By proactively addressing these critical 401k plan sponsor questions, sponsors can enhance their plans, protect participants, and shield themselves from unnecessary fiduciary exposure.
Tag "Ron Surz"
Here’s where the real disconnect kicks in: participants and pros don’t speak the same language on risk. Participants “feel” it. Meanwhile, advisers whip out rulers like standard deviation or some index, measuring volatility in neat little boxes.
Making matters worse is the changing regulatory environment once the new SECURE Act 2.0 rules become effective. The good news is the dust settles after that.
Here the intent is to make it possible for a plan/IRA to apply the QDIA safe harbor to involuntary rollovers. But how will this impact plan participants?
This has been the most challenging of best practices. It has evolved over the years from “you can’t do that” to “you need to do that.” What does it take to make it better? Has the technology environment changed in such a way as to address long-standing obstacles.
Laffer postulated that tax receipts might be increased by reductions in the tax rate because such reductions would bring people out of the underground economy and also reduce the usage of tax shelters. This advice was implemented in President Ronald Reagan’s “Reaganomics,” and it worked to increase tax revenues.
For all the good intentions, however, what will happen when the rubber finally meets the road? Will the new DOL Fiduciary Rule really level the playing field?
Plan sponsors need to think about it in these terms: Does it make sense to have a pork-belly ETF on a 401k investment menu? How about orange futures?
This broader definition of fiduciary may impose a potential hardship on a segment of the retirement industry that has been trying hard to gain a foothold in plan infrastructure.
I 💖 Fiduciary
All kidding aside, Valentine’s Day is more than cards, candy, and Cupid. It’s about renewing a vow to treat each other with the highest fiduciary standard.