Is your retirement plan at risk because your sponsor is guilty of lethargy?
By Paula Aven Gladych
Many retirement plans are at risk of failure because plan sponsors have the same lethargy about retirement savings as their employees.It is very easy to “set it and forget it” on both sides.
So what can retirement plan sponsors do to make sure they aren’t wasting their money and resources on a plan that doesn’t stand a chance? The most important step is to hire a financial advisor who has a lot of experience working in the retirement plan space and a recordkeeper whose focus is retirement plans versus something they do on the side,” said Kathleen Connelly, executive vice president of client service at Ascensus in Pennsylvania.
“The complexity of the regulatory environment and the number of things advisors, employers and recordkeepers need to keep an eye on…that list is getting longer, not shorter,” she said.
By working with people who are really focused on this as part of their practice and is a significant amount of their practice, plans will see stronger expertise, stronger control and more benchmarking taking place, she said. The same goes for the recordkeeper. It is important to work with a recordkeeper that is financially sound and is investing in its systems, its people and keeping abreast of the regulatory/legal side of the equation, she added.
“I think sometimes it is kind of easy to be swayed by the sizzle of the participant website, technology is important, but if you are doing that in lieu of training for the people who are running the business, it is not the best trade off,” Connelly said.
The next step is to make sure a retirement plan has the basics in place. Do they have an investment policy, a document that is up-to-date and compliant? Do they understand what it means and that it is reasonable to administer a plan using this document as a guide?
Other important questions are, do they have a loan policy? Are they administering the loan policy? Are they watching for loans that may be in default? Are they ensuring payrolls are being turned in a timely manner to the recordkeeper? Financial advisors are integral in helping retirement plan sponsors keep track of all these questions.
Originally published on BenefitsPro.com