The 401(k) market has rapidly changed.Is your plan up to date?
Since 2012, there have been significant changes in 401(k)s which have created new risks and opportunities for small and midsized business 401(k) plans. With this rapid pace of change, many business owners, and even some small advisors and recordkeepers have not been able to keep up. We’ll summarize both changes to the 401(k) industry and the opportunities that exist for you to improve your plan, specifically in the following 5 areas:
1. Staying compliant with increasingly complicated regulations – New government regulations have increased burdens on companies offering both health plans and 401(k)s. What used to be compliant may no longer work. Furthermore, software has improved, allowing many error prone, manual retirement plan administration tasks to be automated.
2. Increasing plan effectiveness by lowering fees – Since 2009, average 401(k) plan costs have dropped by almost 30%*. While average costs have come down, not all 401(k) advisors and recordkeepers have passed those savings along to their clients.
3. Improving the monitoring of your investment options – Are you following best practices on monitoring your plan’s investments? And do you know if your current advisor is acting as a fiduciary, and only picking investment options based on the best interest of your employees, or are they merely a broker who takes on no investment fiduciary responsibilities (but gets a nice commission check)?
4. Driving better employee participation and engagement – Comparing how your plan’s employee engagement stacks up can help you decide if new technologies like virtual advisors can improve your plan’s participation rate.
5. Making savings more tax efficient – Profit sharing and other retirement plan features that allow for higher yearly tax-deferred savings have grown in popularity, and many companies are missing out by not considering these options. This white paper will walk you through these five areas and offer up concrete ideas that you can use to help keep your plan current.