We tend to think of financial inertia affecting the behavior of individuals, but the same principles that lead individuals astray can impact businesses’ willingness to change. A lot of companies take the path of least resistance, thinking, “If it’s not broken, we don’t need to make changes.” However, if you sponsor a retirement plan for your employees, evaluating how your plan measures up can be more beneficial than you may imagine.
Spurring Needed Action
A skilled retirement consultant can help you uncover solutions to manage fiduciary risk, simplify administration and advance the level of retirement readiness for employees. An independent study of your plan will give you a true measure of whether your plan is competitive or effective in achieving its long-term goals.
Selecting competent service providers is one of the most important fiduciary duties. The first step is to understand all the services that make up a 401(k) plan and apply appropriate benchmarks to measure their value. Although some consider fees a key differentiator, the true issue concerning fees is whether the business and employees receive good value for their money.
Is Your Business Meeting Plan Fiduciary Obligations?
If your company sponsors a retirement plan, how are you managing your fiduciary obligations and investment reviews? With higher frequency than in the past, fiduciaries of retirement plans are receiving unexpected letters from the Department of Labor, giving notice of an investigation to determine whether any person has violated or could violate one of ERISA’s fiduciary responsibility provisions. Fiduciary Board training can help educate plan sponsors on the risks and responsibilities associated with being an ERISA fiduciary. And hiring an investment professional who is experienced in retirement plans will add fiduciary protection.
Important Features of an Educational Program
Educational programs to manage risk are now standard in the retirement industry. Qualified partners should be experts at providing solutions for retirement plans and philanthropic organizations. Look for a fiduciary continuing education program designed to fit the needs of your directors rather than a generic, one-size-fits-all program.
Key program features include:
- Dialogue concerning key fiduciary risks for your organization’s ERISA plans, nonprofit governance or both
- Practical identification of fiduciary risks and methods to mitigate them
- Discussion of proper internal controls for fiduciary processes
- Convenient scheduling to meet the needs of your board
- Expertise from attorneys well-versed in fiduciary management
The most important aspect of keeping your business’s retirement plan on track is to act before you run into an issue. Considering the suggestions here and how they fit your business’s circumstances will help ensure your employees have the kind of retirement you want for them.
About the Author
Phillip Long, JD
Vice President, Employee Benefit Legal Services
Phillip has nearly 15 years of legal experience and is involved in all facets of retirement-plan consulting. He presents regularly at national conferences on retirement plans and fiduciary duties. Phillip is a magna cum laude graduate of Wake Forest University School of Law and a licensed attorney in North Carolina.