Retirement Plans

One of the first questions that you will be asked during a Department of Labor visit is, “Do you know your plan costs?” You have an obligation as a plan sponsor to know what your plan expenses are, specifically, the expenses paid by the assets of the plan. The basic components of retirement plan expenses include:

• Investment Costs
• Administration Costs
• Trustee Fees
• Advisor Compensation

The least expensive plan does not always equate to the best plan for your employees. However, it is imperative for you to understand whether the costs the plan is paying are reasonable in relation to the services you and your employees are receiving.

Plan communication is vital; not only as a legal obligation, but also in emphasizing to your employees how valuable a benefit the retirement plan can be to them. Equally important is consistent communication to the plan committee regarding plan management and performance. The most effective communication tool for your retirement plan is a qualified advisor specializing in retirement plan operation and personal financial planning. Access to a competent advisor can be one of the most powerful tools in operating a successful retirement plan. 

The investments inside your retirement plan are not required to always produce positive returns. However, ERISA law clearly states that a prudent process must be in place for the selection, monitoring, and replacement of investment options within a retirement plan.

A documented, repeatable, and defendable investment process not only assists you in your fiduciary obligations, but will also give your employees the opportunity for a more successful retirement.

A retirement plan fiduciary may be identified in the plan document. However, an individual may be considered a fiduciary whether explicitly named as one or not. Anytime you are considered a decision maker on a retirement plan, such as the plan administrator, a retirement plan committee member, or a trustee, then you may be personally liable for your company’s retirement plan investments.

If you find yourself making decisions regarding your company’s retirement plan, then it is likely you are considered a fiduciary. If so, you are obligated to make decisions that benefit your employees and their beneficiaries. Clearly defining who is and is not a fiduciary is the first step to helping you understand and identify fiduciary responsibility. Contact us for a no-cost review and analysis of your plan.

Our goal is to help plan participants achieve successful outcomes through education so they can make work “optional” in their retirement years.