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401k Plan Administration Requires Careful Oversight

401k Plan Administration Requires Careful Oversight

401k plan administration is not as simple as plan participants and employees may think.  The compliance rules and investment functions require the watchful eye of company fiduciaries and expert partners.  At the conclusion of a Plan Sponsor University (TPSU) Fiduciary Education Program held at a University on Phoenix Arizona, TPSU Founder and CEO, Fred Barstein spoke with Teresa, a TPSU Program attendee. Teresa has some responsibility for the overall 401k plan administration at her firm where she relies on professional service providers to oversee various aspects of the 401k plan administration.  Good ongoing communication among the Third-Party Administrator, the Investment Advisor, and the Recordkeeper is crucial to maintaining a strong retirement plan. Employing retirement plan partners who offer well-thought-out solutions can be the difference prospective solutions can be the difference for the plan sponsor and their plan participants.

Full Transcript Here

Fred Barstein:
This is Fred Barstein with 401k TV, just completed a TPSU program in Phoenix, Arizona. I’m here with Teresa. Welcome, Teresa.

Teresa:
Thank you.

Fred Barstein:
Okay if we ask you a few questions?

Teresa:
Sure.

Fred Barstein:
One of the things you talked about today was experts, the good and the bad. That was what was working and not working. In terms of what was working, what’s your experience with experts that when it works?

Teresa:
When it works, working with the experts they’re a lifeline. They really help with understanding what needs to be done next or if you’re just trying to figure out what you need to do. But it’s building that relationship, making sure it’s the right one where you can have some sort of contact. You’re not getting lost in some sort of black hole or telephone. They respond to your questions. They respond to your email.

Fred Barstein:
Not an 800 number?

Teresa:
Right, not an 800 number. They come down once a year or twice a year or something like that. There’s personal contact with you and your employees. It makes a world of difference for participants in the company.

Fred Barstein:
It can be an advisor or a TPA, that kind of relationship?

Teresa:
Advisor, TPA, even the plan itself, that person.

Fred Barstein:
The record keeper?

Teresa:
Record keeper, because a lot of times it’s like, I don’t know what to do, so I need some help.

Fred Barstein:
Right. Let’s talk about that not working, so when that doesn’t work. What are the issues?

Teresa:
Some of the issues sometimes then it’s who do you go to get the answers and get what you need, resolved. Then sometimes it seems like the experts aren’t talking to each other and they’re like, okay, you need to actually, that’s a broker issue or that’s actually a TPA issue and we’re just really trying to get something figured out so I know what to do.

Fred Barstein:
Right.

Teresa:
And help somebody else out.

Fred Barstein:
That’s the worst thing. It’s like, well, that’s not my problem. You need to go there and you feel like, well, aren’t you supposed to do that for me? If somebody, if in your situation when you found yourself not with the right expert, what did you do?

Teresa:
That was still a challenge and requested actually a different contact person was a part of it. Or if there was somebody who started, I got a relationship with, started to go to that person and ask for that person, and particularly in each topic first time. I built, it’s really a building relationship too. I was able to get through my questions because I knew this person helped me out, figure it out and work with me on it.

Fred Barstein:
Right because you can’t be the expert on everything.

Teresa:
I’m not an expert.

Fred Barstein:
That’s it. Well Great. A couple of things that you picked up today that you learned?

Teresa:
A couple of things I picked up today and learned was to really vet and look for your experts and look at fees and expenses that come up with employees. I’ve seen that before. There’s even more to it than I had thought. That’s something that was like, oh, really kind of look at that and make sure, and education. People are screaming for education. They don’t understand what 401k is, retirement so needs some education, whether it’s from an expert, myself or somewhere.

Fred Barstein:
Right. Great. Well good. Well, thanks for your time today.

Teresa:
Thank you.

Fred Barstein:
Thank you for watching 401K TV.

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