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When Good 401(k) Plan Providers Stumble
I’m a fan of business history. There are so many successful businesses that eventually stumble and fail. I remember when Sears was such a huge factor in retail sales and it’s at death’s door. Other successful companies have been dead for a while, such as Montgomery Ward, Blockbuster Video, and Toys ‘R Us. There are many great plan providers that eventually go bad and are headed for a long-term goodbye. The problem is there are certain characteristics that you can see a mile away, but they can’t. These are some of the ways where a good plan provider stumbles and becomes a bad provider.
I don’t get the push for ESG
While the Biden-led Department of Labor (DOL) has given the green light for environmental, social, and governance (ESG) funds within 401(k) plans, I don’t get the push.

The push isn’t from many plan sponsors and I don’t see many plan participants demanding it. To me, it seems more hype than anything else.

I’m not a fan of ESG funds because you have 3 ESG funds out there and you’ll have 4 different explanations on what it means to be ESG. In addition, an ESG fund to me is no different than a sector fund and I’m not a huge fan of sector funds within a 401(k) plan.
How many PEPs went under? No press release for that
We’ve had pooled employer plans (PEP) since January 1, 2021, and. with the weekly press releases on new PEPs, I’m just wondering how many PEPs are already dead.

Building a successful PEP will require distribution, dedication, and time. A press release to announce a PEP is easy, being able to bring in assets. Is hard.

Just wondering how many PEPs are already dead, I assure you that there won’t be a press release for that.
Costco settles for $5.1 million in ERISA case
Costco has reached a settlement that will see them pay $5.1 million to resolve allegations that it committed fiduciary breaches within their 401(k) plan.

A participant in the Costco 401(k) Retirement Plan filed a lawsuit against Costco by claiming the company breached their ERISA duties by authorizing the plan to pay unreasonably high fees for recordkeeping; failing to objectively and adequately review the plan’s investment portfolio with due care to ensure that each investment option was prudent in terms of cost; and maintaining certain funds in the plan despite the availability of identical or similar investment options with lower costs and/or better performance histories.

As part of the settlement, Costco “will ensure that the plan administrative service per capita recordkeeping fee deducted from plan accounts does not exceed $3.25 per plan account per quarter.”
I don't get niche plans
When I grew up, we had one type of Cheerios and when they added Honey Nut Cheerios, we had two. I think if you go to the grocery shelves, you may have 20 today. This was General Mills appealing to a marketplace to sell more Cheerios by offering so many varieties.

401(k) plans aren’t boxes of cereal. I don’t see the need to sell a 401(k) plan that has a niche investment focus because I believe that the best 401(k) plans offer plan participants a wide breadth of plan investments, as long as they don’t offer too many investment options.

Recently, an investment advisor focused on solving climate change, has decided to introduce a climate-focused 401(k) plan for employers. As an Exxon-Mobil shareholder who first started buying that stock in April 2020and the proud owner of a 2012 Toyota Prius V, I don’t understand why an employer would be interested in a 401(k) plan that was limited in its investing options. Plan sponsors are plan fiduciaries, I think narrowing the investment options within a 401(k) plan makes no sense because you’re cutting participants off from sectors that could lead to top investment growth over time.


Seattle registration for September is open.

Seattle has been booked for September 9th. The event will emanate from T-Mobile Park, home of the Seattle Mariners.

For 401(k) advisors, it's the most fun for just $100. Meet and greet with a mariners great, lunch, stadium tour, and 5 hours of content from great 401(k) plan providers.

Sign up for the event can be found here.

We will have game tickets that night as the Seattle Mariners take on the Atlanta Braves.

For information on sponsorship, which starts as little as $500, please click here.



Charlotte is finally booked.

Charlotte has been booked for November 18th. The event will emanate from Bank of America Stadium, home of the Carolina Panthers.

For 401(k) advisors, it's the most fun for just $100. Meet and greet with a Panthers great, lunch, stadium tour, and 5 hours of content from great 401(k) plan providers.

Sign up for the event will be available soon.

For information on sponsorship, which starts as little as $500, please click here.