Let’s face it – reviewing your company’s retirement plan design every year can be tedious – and complicated. It can seem like a headache and a hassle – not only for you, but for your employees. After all, as shown in a recent survey, 80% of Americans have avoided making changes for retirement plan management, and 40% of respondents would choose renewing their driver’s licenses over reviewing their retirement plan.
However, an annual review of your 401K plan design has become increasingly important over the last decade as the U.S. Department of Labor has been putting company investment standards in place, following high-profile instances of retirement plan management and welfare plan management gone haywire.
For owners of a small business choosing a retirement plan, it is important to remember your fiduciary responsibility. In case you need a reminder, a fiduciary is responsible for retirement plan design that benefits the plan participants and is required to follow their plan documentations and carry out their duties prudently, all while acting with the sole goal of providing benefits to the plan participants.
When small business owners do not manage their 401K plan design consistent with the Department of Labor’s fiduciary standards, they can be held liable for mismanagement – however slight or accidental – of retirement plans.
Despite the Department of Labor’s insistence on employers playing by the rules with their 401K plan design and retirement plan management, the DOL has not done enough to educate business owners about their fiduciary responsibilities and empower them to make wise chooses when choosing a 401K plan for their employees.
This is where retirement plan consultants like Noble Davis come into play. 401K consulting from a dedicated retirement plan consultant firm helps you ensure that you are protected legally – and that you are taking care of your company’s financial future and that of your employees as well. Specialists in 401K plan management will guide you as you meet your responsibilities of choosing wise investing strategies and will also make sure that you meet your administrative responsibilities such as keeping your plan compliant with local, state, and federal law, maintaining records, determining employee eligibility, and more.
Another part of an employers’ fiduciary responsibility is the payment of fees associated with assets from 401K plans. The exact language encoded in the relevant laws, however, is unclear – you are expected to pay “reasonable and necessary fees” while carrying out your retirement plan management. But what, exactly, is a “reasonable and necessary fee?” Retirement plan consultants specializing in 401K plan management will determine the expenses required from your company in order to meet these fiduciary responsibilities.
The world of retirement plan management is complicated, and one false move could lead to serious penalties that could compromise the financial future of your business. This is why 401K consulting is so important! Retirement plan consultant for your business will ensure that you are able to meet fiduciary requirements, and help you protect yourself from liability if a problem arises.