The Godfather Rules And Your 401(k) Plan
Two of my favorite movies of all time are The Godfather and The Godfather Part II. I’m even a fan of The Godfather Part III, despite some of the unwarranted criticism. It’s more than movies about gangsters. It’s about family, friends, relationships, and business. I love the quotes from the movies because you can apply many of them to situations in the non-criminal world. It’s also can teach you lessons about how to properly operate a 401(k) plan, so enjoy.

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How You Can Delegate Your Fiduciary Liability As A 401(k) Plan Sponsor
Running a business is a complicated activity. You have to be an expert in your field, service, or specialty. To get your work done, there is a point where you will need to outsource some key employer functions such as payroll and other human resource functions. So it stands to reason that it may be wise to cut back on the headaches and outsource your retirement plan. The concern that plan sponsors should understand is that when it comes to their 401(k) plan, there is a difference between outsourcing and delegation. So this article is going to make 401(k) plan sponsors like you understand what outsourcing your plan entails and the traps you should avoid.

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It’s The 401(k) Plan Sponsor’s Responsibility, Just Because It Is
I have been a fan of Sesame Street since I was a child and again as an adult when my children were younger. It’s a brilliant show that has educated millions of kids in the past 50 years. One of the greatest events in Sesame Street history is when in 1983, they acknowledged the onscreen death of the owner of the luncheonette, Mr. Hooper (the actor Will Lee died the year before). Big Bird wanted to give a picture he drew of Mr. Hooper to him and didn’t understand that since Mr. Hooper died, he wasn’t coming back. Big Bird doesn’t think it’s fair and how he’ll miss Mr. Hooper and the adults tell him that the way it has to be: “just because.” While a retirement plan sponsor isn’t the same as a giant bird Muppet; there are many times that they have to be told that they are responsible for and they are on the hook “just because”. This article is about the stuff that a 401(k) plan sponsor is responsible for, whether it’s fair or not.

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Revenue Sharing is costlier to plan participants
I love when studies on retirement plans state the obvious.

According to researchers from Vanderbilt University; the University of Texas at Austin and the National Bureau of Economic Research (NBER); and the Board of Governors of the Federal Reserve System, revenue sharing paying mutual funds are more expensive than funds that don’t pay them.

The results indicate that revenue sharing translates into higher expense ratios in the retirement setting, while direct fees are not significantly different across revenue-sharing and non-sharing plans. Consequently, participants face higher all-in fees in revenue-sharing plans.

Higher fees are not offset by higher returns, according to the study.

You don’t need a brain surgeon to figure that it’s actively managed plans that pay revenue sharing and these funds have a higher expense ratio that can pay revenue sharing to the recordkeeper.
Some providers will do as minimal as possible
Another thing that sets plan providers apart is the work ethic, whether they will do what’s needed to be done or do it as minimally as possible.

If you’re working with a third-party administrator (TPA) and it’s their job to bring a plan aboard, some will just not help you in what you need to get done especially if you’re working on their behalf. A great TPA is going to have all hands on deck and help you in any which way they can.
Check out That 401(k) Podcast
Check out That 401(k) Podcast and my YouTube Channel.
The podcast you should listen to if you have the time, as well as YouTube videos.

Please check out That 401(k) Podcast. We tackle important 401(k) subjects for both plan sponsors and plan providers. In addition, we talk about all the events I'm hosting. as well as important cultural allusions.

Find it here and on Apple Podcasts here.

To catch the podcast and our virtual events, find my YouTube channel here.