For 401(k) plans, the best of times is now. 

Yesterday is overrated.

  I always tell this story because it's funny: I went to a Jewish day school that didn't provide lunch, so I had to brown bag it everyday. On one day, my mother forgot to put in my can of Coca Cola in the bag and instead put in a can of Schaeffer beer. Let's just say as a 9-year-old teetotaler, I threw it right in the trash. As a parent now, I can understand how mistakes like this can be made, but I guess it helps I only drink bottled beer and my kids don't drink soda. So I won't make this mistake.

Everyone talk about how things were so much better way back when and I think people are wrong. They mistake the good old days not because they were better, but just because they were younger.

Look at beer. Was the time of Schaeffer, Schlitz, Lowenbrau, and Stroh's better than the microbrewery revolution that was started by Boston Beer Company? Was having only broadcast TV better than the hundreds of channels and streaming services we have now?  Was the movie theaters riddled with poor seating and the smoking section in the last 3 rows better than the multiplexes today?

When people talk about how great 401(k) plans were back in the day when I started in the business in 1998, those people are usually retirement plan providers who has much better margins in business in the days before increased competition and fee disclosure.

Except for the inflated returns of the late 1990' stock market, which was nothing but a bubble, everything about 401(k) plans is better for plan sponsors and participants. While litigation has increased against plan sponsors, companies that sponsor retirement plans are now smarter for that and know more about fiduciary responsibility than companies did in the go-go 1990s.

Technology is better. I remember the first participant website I had to use when I enrolled in a 401(k) plan for the first time. It was using a platform called SmartPlan and there was nothing smart about it because the interface was awful. Everything is so much easier for plan participants on the web.

Education and enrollment materials are better. Investment options are better; investment options are also less expensive. Investment advisors are more knowledgeable. Third parry administrators are better in their customer service. Communication is better and information is easier to obtain thanks to the web.

The only people who think 401(k) pans are better back then are probably those that made a lot more on an industry that was cloaked in secrecy and hiding the balls from plan sponsors and participants.

Value is one of the more important concepts in business and plan providers (thanks to the transparency of mandatory fee disclosure) are under pressure to show their value to plan sponsors. By showing value, plan providers have the power to dissuade plan sponsors from every contemplating someone else from taking their spot as a plan provider.

When I talk about the Retirement Plan Tune-Up (the legal review for plans for only $750, cheap plug here), I always talk about the client who asked me to do one for them.  Plan was safe harbor 401(k) and administration looked good. On this $14 million plans, broker was being paid about 60 basis points, which was pretty high for a plan of that size. When I asked for any plan education materials, investment meeting minutes, or an investment policy statement, I was told that the broker never provided them to the client. Let's just say that based on my advice, the broker was replaced by a 3(38) fiduciary for about half the cost. Needless to say, this broker didn't show value.

Too many retirement plan providers focus on cost and I think that's not a great marketing plan because saying you're cheaper isn't going to turn a lot of heads especially when there is more discussion and concern about fiduciary liability for plan sponsors. Stressing value is a better marketing plan, it shows plan sponsors how important they are and how much liability protection for a reasonable fee by using this provider. A plan provider can always stress low cost in relation to the competition as long as they stress the value of the services provided especially because low fees is often equated with the no frills and plan sponsors can't afford plan provider that don't offer frills.

Showing value is one of the most important concepts in retaining clients and it's better to market it than just saying you're cheaper.

Give us a call when you need a new plan document or help in your restatement process.

If you are a plan sponsor or a plan provider looking for an inexpensive plan restatement, then look no further than The Rosenbaum Law Firm P.C. If you are a third party administrator with too many restatements to do and too little help to get the job done by April, we're here as well.

We're not the Home of the Whopper, but we're the home of the inexpensive restatement. We will beat any price as long as the price isn't free because we cant compete with free.

In addition to an inexpensive volume submitter restatement, we also afford an attorney-client relationship to boot.

We have 17 years of experience in this business and the ability to crank out restatements to meet your deadline and pocketbook.

Give us a call at 516-594-1557, we're ready for restatement season.