Retirement plans come in all shapes and sizes: DC Plans, DB Plans, Non-Qual, 401(k), 403(b), 401(a), 457, SEP IRA, Simple IRA, Roth IRA, Cash Balance, HSA… and any other number letter combinations that you can think of.
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The steep uptick in 401k plan trades in reaction to the wild market swings over the last several weeks could be a precursor of a mass reallocation of participant portfolios to more conservative investments.
Among the primary choices a plan sponsor has when considering the management of their 401k plan is bundled or unbundled. For many plan sponsors initiating a smaller plan, the bundled approach may seem more appropriate due to its lower cost. As many later find out, the lower costs also mean they are not getting the advice they need or are being plagued by hidden fees.
All it takes is a quick 600 point drop in the stock market to fray the nerves of 401k investors. But who can blame them with the devastating crash of 2008 still fresh in their memories. 401k participants lost, on average, 40 percent of their retirement account balances causing many to completely rethink their retirement plans.
We recently came across a large 401k plan with more than 30 funds in its fund lineup! Sadly, I wish I could say this was the exception, but we actually see this in many 401(k) plans when they first come to us from another provider.
Just as most 401k plans are unique in their offerings and operations, so too are the investment committees that should be formed to guide them. However, in confronting the critical issues facing employers in the management of their plans, all employers, and their investment committees should address one key question, if not quarterly, at the very least, annually.
As is customary with the proposal of any new regulatory rule or provision, the Department of Labor has opened the floor to comments regarding its proposed rule change to extend fiduciary responsibilities to all advisors who work with qualified retirement plans.
Successful business owners are known to be all-consumed with building their business, often investing a substantial amount of their time, energy, and money in their efforts. So, it’s not surprising that many business owners reach a late stage in life without having saved sufficiently for their retirement.
After a rather tumultuous decade in which the overall performance of 401k plans is best described as anemic, we may be entering a period of redemption that could have 401k plan sponsors and participants smiling again.
The landscape for retirement plan sponsors continues to change with the most recent Supreme Court decision in the case of Tibble v. Edison International. In fact, the decision, which ruled in favor of the employee group, constitutes a tectonic shift in the relationship between plan participants and plan sponsors.