Classic 401(k) Plan Sponsors Mistakes That Often Leads To Costly Fixes.
They're classic.

What makes a classic? Whether it's a 1963 Chevrolet Corvette or the Sgt Pepper album, it usually means that it's the highest in quality, class, or rank. So it's kind of funny that there are 401(k) plan sponsor mistakes that are actual classics because these mistakes are usually the mistakes that lead a plan sponsor into a whole host of trouble and liability. So this article is about classic 401(k) plan mistakes that you need to avoid in running your plan.

For the article, click here.
They Say Their Plan is OK, But Plan Sponsors Usually Have No Idea.
So many plan sponsors really have no idea.
 
When I was dating my wife, she asked me if I had a good credit score and I said I did. I never checked my credit score, but I paid all my bills in full and on time. Of course, when I got a copy of my credit report, my credit score wasn't so great because that credit card account that I opened in college with my mother had a $17,000 balance that I wasn't aware of since I didn't use the card for about 9 years. My wife was upset because she thought I made an affirmative statement without really knowing the actual truth. Plan sponsors do that all the time when they tell retirement plan providers that their 401(k) plan is OK without having any background or information to make that affirmative statement. Plan sponsors can claim that their 401(k) is fine, but that doesn't mean that's true. So this article is to show 401(k) plan sponsors the idea that their plan is in good shape may not be grounded in reality.

To read the article, please click here.

Great 401(k) Plan Features That Aren't A Fit For Everyone.
There is no right solution for everyone.

My wife and I go to the local shopping outlet center to see what's going at Pottery Barn and Williams & Sonoma. At Williams & Sonoma, I'm amazed as to how many different kitchen items there are. While every household certainly needs utensils, plate ware, and cookware, there are gadgets to pit cherries and things you never imagined were ever created. For those types of gadgets, you have to find out what you really need so you don't go broke spending on gadgets you'll never use. The same can be said about features of retirement plan services and retirement plans that might look great on paper, but may not be the right fit for you. So this article is going to explain some wonderful retirement plan features that may not be a great fit for everybody.


To read this article, please click here.

Don't panic if a provider you knows gets sued, but.....
Providers do get sued, that's the price of the game.

As a plan sponsor, you're always going to run into another plan provider that is interested in picking you as a client. Plan providers can only grow their business by adding new clients, so it's a part of the game.

As part of any client solicitation, it's not unexpected that a soliciting plan provider will run down an incumbent provider especially if they're getting sued. A lawsuit isn't evidence of any wrongdoing and it's pretty hard to find any large plan provider (especially plan custodians) who hasn't been sued. Lawsuits don't mean much as settlements because a lot of class action lawsuits get tossed before there is any settlement or verdict.

That doesn't mean that you should ignore any news about litigation against plan provider especially when it's something you can't ignore like a lawsuit over stolen plan assets.
You should always be aware of what is going on with your plan providers, but the filing doesn't necessarily mean that something is wrong.



Don't pick the Bud Light of TPAs.
It's a big problem.

The best selling beer in the United States is Bud Light. Does that make it the best? If given the choice of drinking Bud Light and not drinking beer, I'll pick not drinking beer. There are probably a thousand beers better than Bud Light, but for many reasons, it's the most popular. It's probably the most popular because of its lower cost and Anheuser-Busch InBev's marketing dollars.

So when one of those large payroll provider TPAs tell you how many clients they have, take it with a grain of salt. While they administer the most amount of plans, they also don't have the most assets under administration which means that they administer more, smaller plans.

Hiring TPA is all about fit, you need one that fits your needs and that's going to do a great job of administering your plan with limited issues. Picking a TPA just because they're larger is just an awful mistake. If I were you, I'd pick the Sam Adams of TPAs, but that's just my taste.

Introducing That 401(k) Podcast.
The 401(k) Podcast like no other.

That 401(k) Podcast is up and running. Weekly 35-40 minute conversations with tips and advice for both plan sponsors and plan providers.

You can find the podcast here and here. It's also available on ITunes and you can find that link here


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The Rosenbaum Law Firm Review, October 2018
, Vol. 9 No. 10

The Rosenbaum Law Firm P.C.
ary@therosenbaumlawfirm.com
734 Franklin Avenue, Suite 302

Garden City, New York 11530

Phone 516-594-1557 

Fax 516-368-3780    


 

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