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Retirement Plan Provider Gimmicks All Employers Should Be Wary Of.
Be wary of some of these marketing gimmicks.
 Back in the day when I was a kid growing up in Brooklyn (much scarier then in the 1970s and 80s), there was an electronics retailer named Crazy Eddie's. The commercials were memorable as the sales pitchman Jerry Carroll claimed that Crazy Eddie's price were insane. While the commercials were memorable, much of the advertising was misleading. When they would advertise a blowout price on an item, you would go to the store and always find out that the item was sold out (maybe they had 2-3 of these items in stock). Of course, Crazy Eddie imploded because of account- ing fraud. The retirement plan industry often uses a lot of gimmicks and sales pitches to hook retirement plan sponsors without these sponsors really know what they are getting into. So this article is about the gimmicks and marketing sales pitches that plan sponsors should be wary of.
For the article, click here
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The Smaller The 401(k) Plan, The Bigger The Problems.
Plan sponsors can minimize, can never fully eliminate liability.
 401(k) plans are a world of contradictions. It's one of the few employer provided benefits that an employee usually pays for through their account balance. It's a retirement plan that an employer offers that the employee has to mostly fund. Most 401(k) plans offer participant directed investments and participants are usually the least equipped to make financial investment decisions. 401(k) plan sponsors are on the hook for liability for inefficient work performed by their retirement plan providers. One of the biggest contradictions out there is that the smaller the 401(k) plan, the bigger the problems. So this article is why smaller 401(k) plans have more issues than larger plans and why small 401(k) plan sponsors must be more vigilant in their role as plan fiduciaries.
To read the article, please click here.
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The excuses may be novel, but they're just excuses.
 As an ERISA attorney with a national practice of plan sponsor and retirement plan provider clients around the country (cheap plug here), I hear many excuses as to why plan sponsors don't want to take a look at their retirement plan. There are tons of excuses that they tell their current or prospective plan provider why there is no need to look at their retirement plan and these excuses are nonsensical when you look at the heap of trouble a plan sponsor can be in if they don't take care of their retirement plan. So this article is about plan sponsor excuses why they don't take a look at their retirement plan and why those excuses are absolutely wrong.
To read the article, please click here.
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It Takes Only One Participant To Sink A Retirement Plan Sponsor.
All it takes is one disgruntled plan participant to drop a dime on their plan sponsor.
 I am a fan of the original Highlander movie with Christopher Lambert and Sean Connery. The subsequent sequels and television series make the cannon of the series nonsensical, but I do love the original. Maybe it's because of the soundtrack by one of my favorite bands, Queen or maybe because it had footage of a Pro Wrestling USA/ AWA wrestling show I attended live at the Brendan Byrne Arena in 1985 (even though the movie claimed it was Madison Square Garden which has an exclusive deal with the WWF). The theme of the movie was that there could be only one (even though the other movies and TV shows showed that there was clearly more than one). For retirement plan sponsors who do nothing to minimize their fiduciary liability, they need to know that it only takes one. This article is about how it only takes one plan participant to cost a plan sponsor dearly in terms of headaches and fiduciary liability.
To read this article, please click here.
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Most of the time, it's a euphemism and not a new service.
Be careful of what plan providers offer you.
 So much of any industry is dedicated to marketing, because marketing can help a company sell a product or service just based on how it's marketed. Whoever sold the pet rock is still probably laughing all the way to the bank.
In the retirement plan industry, there are quite a few marketers who can take a normal product or service that most providers offer, but make it sound more important than it really is. Sort of like Big Mac's special sauce, which we all know to be Russian Dressing.
I remember a few years back of a third party administrator that I work with who developed this special professional services pension plan which was geared towards professional service companies that offered a pension with participant direction. All it really was, was a cash balance plan with participant direction (before PPA 2006 made participant direction in a cash balance plan impossible).
Look at the folks who offer fiduciary warranties where the provider neither serves as a fiduciary nor offers a warranty that will ever be used. As a friend of mine pointed out, the insurance providers who offers these warranties make money by insuring risk, so what does it say about those fiduciary warranties if they are free?
I can't wait for the ERISA 3(16) or 3(38) fiduciary to call themselves a retirement plan concierge or butler to make what they do sound better for the masses.
The point is that as a retirement plan sponsor to make sure what you are getting in plan services, because a euphemism is a euphemism and that doesn't protect you more than what contractually is being offered.
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I could use your support and vote.
 While it's certainly made me some shekels and drachmas, I truly appreciate my readers. They put up with a lot of stories about Caddyshack, Crystal Pepsi, and my disdain for a managing attorney named Lois and her sidekick Fred.
I am overwhelmed that I have been nominated as one of the Top 100 Most Influential People In Defined Contribution on 401kwire.com. I am not big on beginning, but I would appreciate your support and vote.
You must register to vote and don't have to be a subscriber.
To register and vote, visit here. I am listed under thinkers.
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The Rosenbaum Law Firm Review, July 2013, Vol. 4, No. 7 734 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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