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Time to Review Your Company's Retirement Plan

Time to Review Your Company's Retirement Plan

July 13, 2021

We get it – you’re a busy small business owner and you pour your heart and soul into making sure your clients are happy, your company is profitable, and you still have time for your own family. It’s not easy, but you never expected it to be. You expected that if you worked hard, you’d be able to forge your own path and live a little slice of the American Dream – maybe put away some money for retirement and relax on a beach somewhere in your golden years when the kids are done with college. Who wouldn’t want that?

So it makes sense that the relationships you’ve established with your benefits providers aren’t exactly at the top of your “To-Do” list every year. Things pretty much work the way you expect them to. Vendors get paid on time, your employees are happy, and the lights go on. “If it ain’t broke...”

When it comes to your employer retirement plan, most plan sponsors – i.e., business owners – serve as fiduciaries on their plans. A fiduciary is legally and ethically responsible for acting on behalf of another person or persons. In the case of your retirement plan, that means your legal responsibility is to your employees. Since you’ve set up the retirement plan, it’s your job to make sure it’s current, compliant, and competitive, among other things.

The Department of Labor (DOL) is the main government agency responsible for overseeing employer retirement plans, and per the National Association of Plan Advisors, “[w]hile the DOL may not formally require plan sponsors to regularly request RFPs from plan service providers, the agency does assume that “… plans normally conduct requests for proposal (RFPs) from service providers at least once every three to five years … ” in anticipation of changes to fee and service disclosures. In fact, the DOL has stated: “… in hiring any plan service provider, a fiduciary may want to survey a number of potential providers, asking for the same information and providing the same requirements. By doing so, a fiduciary can document the process and make a meaningful comparison and selection.”

In practical terms, what that means for a small business owner with a 401(k) is that building reviews of the plan into your workflow is an easy way to manage legal liability and ensure the plan is staying competitive.

One happy side effect of putting regular reviews into your plan management process is that you have an opportunity to see what’s new in the retirement plan landscape. Simple plan design changes – adding a Roth option or a safeharbor provision, for example – can improve your plan’s performance and give employees better options for building their nest eggs.

Bringing on a Financial Advisor to manage the RFP process is a quick and easy way to get a second set of eyes on the plan and help you evaluate your options. At IIS Financial Services, we’re happy to give you a complimentary review of your plan and an executive summary for your fiduciary file.

Feel free to schedule a call or a meeting for a quick chat. We’ll work with your schedule to make sure that the RFP process is as quick and easy as possible.

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