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The Hidden Dangers for the 401(k) Plan Sponsor.
What plan sponsors don't know can hurt them.
 Thalidomide was supposed to be the wonder drug that helped women manage morning sickness until they discovered it caused birth defects. Asbestos was supposed to be the ultimate fire resistant material that was later found out to cause mesothelioma when produced or when disturbed. When companies decided to ditch defined benefit pension plans for a cheaper alternative in the 401(k) plan, they also had a hidden danger with a 401(k) plan, but it doesn't have to be that way. Unlike dangerous products like Thalidomide and Asbestos, a 401(k) plan doesn't have to be a danger. If managed correctly, a 401(k) plan is an effective retirement plan for the employer and employees. If not, it's retirement plan thalidomide except the plan sponsor doesn't know the danger. This article is about the hidden dangers of a 401(k) plan and what steps plan sponsors can take to minimize that threat.
For the article, click here.
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Retirement Plan Sponsors Need To Be Careful About Buying "Fiduciary Services".
What they buy might not be worth much, the devil is in the details.
 Unlike other languages, English is full of deceptive words that entice people to purchase products and services they think they are getting when they are not. It happens a lot with food. Lemon flavored products have no lemons in them. Homemade food items are made in factories. Chicago style pizza isn't from Chicago. Kosher style catering isn't Kosher and there is nothing natural about natural food. It also happens a lot with retirement plan services, especially when it relates to "fiduciary services" because much of the time, fiduciary services offer very little fiduciary protection to plan sponsors. So this article will try to let plan sponsors know what the term fiduciary really means and what products and services out there don't offer the fiduciary liability protection that plan sponsors assume they are getting.
To read the article, please click here.
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Employers should look to maximizing tax deductions through efficient plan design.
 George Carlin once said that the whole meaning of life is not dying, unfortunately, my favorite comedian died from a bad heart. As an ERISA attorney, I believe that the whole purpose of an employer starting and maintaining a retirement plan is saving for retirement and the more money an employer can put away for their employees is less money for the government to get their hands on. Through careful plan design, an employer can maximize contributions to their highly compensated employees while offering a benefit to their lower paid staff. Poor plan design can be costly to the employer through unnecessary contributions, taxable refunds to highly compensated employees, or inefficient use of plan features. So that's why it's important to employers to find third party administrators (TPAs) and ERISA attorneys (cough, cough) to help them navigate through the many different types of retirement plans and plan features. This article is about how plan sponsors can take employer contributions to the limit that puts more money in the pockets of their highly compensated employees and less money in the pockets of government.
To read the article, please click here.
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10 Tips For The New Retirement Plan Sponsor.
Some points to ponder for the new retirement plan sponsor.
 When a company decides that they want to put a retirement plan in place, it's almost like trying to buy a new car because there are so many choices to make. A company needs to look at several factors to determine what type of retirement plan they want to offer, as well as the goals of the plan they wish to implement. Too many plan sponsors put retirement plans in place without knowing the consequences and costs, whether it's for liability concerns or for the company's bottom line. The retirement plan that a company wants to put in place has to be the right fit because if it doesn't fit correctly, the plan sponsor may either leave money on the table or risk its financial health in running it. This article is a blueprint on what plan employers should consider when they are deciding to create a retirement plan for their employees.
To read the article, please click here.
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The Name Isn't The Game.
Concentrate more on competence and less about the provider's name.
 When I started my own law practice 3 years ago, it was a struggle. To this day, it's still a struggle. When I started my own practice, I really tried to develop relationships with financial advisors and third party administrators just like I did when I was working at the law firm.
One of the relationships that I was trying to develop was with a Connecticut broker who seemed really interested in my past clients when I was working at a New York Third party administrator and a lot of interest in my Retirement Plan Tune-Up (the affordable legal and fiduciary plan review, only $750. Cheap plug here).
So I schlepped all the way up Interstate 95 for the meeting and they seemed very interested in my plan review and they thought they could refer me so much business that they were asking for some sort of exclusivity or favored nation status. So it looked like I was getting a nice pipeline of business. To cut it short, I got blown off as the broker said that his team was concerned that I didn't have a big enough name to partner up with. I thought that was kind of ridiculous since my old firm wasn't that well known outside of Long Island and the plan review service was far more important than any "brand name". Of course thanks to my articles and readers such as yourselves, I have a name or brand name.
The point is that when picking plan providers, plan sponsors may prefer to use plan custodians, third party administrators, or financial advisors that have names or brand names. Having your plan administered by one of the largest mutual fund companies sounds great because it's the name you know, but it's a major headache if the name you know doesn't know how to properly administer the plan.
Bernie Madoff was a name you would know if you were a high flyer and we all know how that turned out.
When it comes to hiring your plan provider, concentrate less on name and more on competence.
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Proud to be part of the future of the legal industry.
 Proud to be one of the first New York attorneys to participate in UpCounsel.com which is a unique service where those who seek attorneys put out bids for law jobs and attorneys put in bids.
Whether you are looking for plan document/ERISA work or even landlord/tenant issues, this is the legal site for you.
My profile can be found on the website can be found here.
New York and California attorneys interested in offering their services on the site, should click this link.
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The Rosenbaum Law Firm Review, October 2013, Vol. 4, No. 10 734 Franklin Avenue, Suite 302 Garden City, New York 11530 Phone 516-594-1557 Fax 516-368-3780
Attorney Advertising. Prior results do not guarantee similar results.
Copyright 2012, The Rosenbaum Law Firm P.C. All rights reserved.
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