Corporate 401(k) Plan Fiduciary Services
As a retirement plan sponsor, there is so much you need to know in order to be in compliance with ERISA. These rules were put in place to protect the worker and the employer. One of the most pressing issues today is the costs associated with retirement plans along with new disclosure rules being rolled out.
Both the DOL and IRS have stepped up their audit process significantly this year. Class actions have been filed against a number of large 401(k) plan sponsors; mostly due to the apparent failure of the plan sponsors to properly monitor fees and expenses. It was clearly noted back in a 2012 Investment Advisor Magazine article that “just beginning in 2010, the DOL audited more than 3,100 plans and found that more than 73% of the plans were required to restore losses to the plan.”
The employer is ultimately charged with the obligation of maintaining their retirement plan for the exclusive benefit of the participants and beneficiaries. Plan fiduciaries do not need to be experts in every area and may hire other professionals to offer expertise. This though does not reduce their fiduciary responsibility.
As a Plan Sponsor you need to know what your fees are, who is paying them, and if they are “reasonable” as defined by the DOL. If you do not know the answer to those questions, you need to find out. Because no two companies are exactly the same, the design and service of your qualified retirement plan is integral to its ultimate success. Your plan should reflect your organizations unique circumstances, needs and objectives.
Goals of a properly structured plan design may include:
•On- site turn-key workshops customized around your 401(K) and company benefits options
•On-site 15 minute 401(K) or benefits review consultation
•On-site tabling event resources for open-enrollment and wellness days
•Key employee (or company wide access) to a complementary financial planning consultation
•Workplace Transition Resource kits that can be provided to new hires or for terminated employees
Ulin & Co. Retirement Plan consulting menu of services:
•Plan Design Assistance & Compliance Review
•Investment Review and Benchmarking
•Work with your investment committee
•Worksite Financial -Ed (WFE) employee services
While many financial planners, brokers and insurance agents can sell qualified retirement plans, most do not work in a fiduciary capacity. As the retirement plan industry is rapidly moving to a more fee transparent and regulated standard – working with an independent RIA advisor team- may help reduce fiduciary conflict of interest from the plan sponsor’s behalf – as independent firms do not have any investment banking relationships or sell proprietary products.
Many times PEO’s, payroll companies, banks and insurance companies that provide their own qualified retirement plans cannot really provide an objective RFP -as they are motivated to keep their own vendor in place and cannot sign on as a plan fiduciary.
If you have not reviewed your Employer Sponsored Retirement plan within the last 12 months we would encourage you to do so. One of the easiest ways to compare your existing plan is to request quotes from other providers which we can assist. The Department of Labor has a fee disclosure form you can download here that helps Plan Sponsors to compare plans.
Offering a retirement plan can be one of the most challenging, yet rewarding, decisions an employer can make. The employees participating in the plan and the employer benefit when a retirement plan is in place. Administering a plan and managing its assets, however, require certain actions and involve specific responsibilities.