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Engaging the CFO in their 401(k) Plan


CFOs carefully watch their defined benefit (DB) plans because of the costs and threats to the viability of the company if the plan is underfunded. They moved to defined contribution (DC) plans like 401(k)s to get out from under that liability thinking they were safe. But is there hidden liability in poorly performing DC plans that might get CFOs to pay more attention like they did with their DB plan?

Hugh O’Toole started his company, Viability Advisor Group, in June 2014 after running the sales and service division of a large, national DC and DB provider to try to engage the CFO after many meetings about the DC where he saw them losing interest. Hugh’s premise is that there is hidden liability with employees who have not adequately funded their own retirement plan. If the employee cannot retire when they want or need to, they continue to work shifting the liability back to the employer who must pay higher healthcare, disability and absenteeism costs not to mention suffer lower productivity for older workers in some circumstances.

But CFOs do not react strongly to general trends and research – they react to spreadsheets and actual data about their own company and employees. Viability AG takes payroll and census data calculating the actual costs from employees not likely to be able to retire on time.

CFOs are not heartless people but their first responsibility is to ensure the continuing viability of the company. They are not likely to put more resources towards their DC plan unless there is a return. Hugh O’Toole’s company is the first to show that actual return in real dollars using a company’s data.

Check out the video with Hugh and look for more from Viability AG on 401kTV.

Fred Barstein

Fred Barstein

Founder & Editor-in-Chief at 401kTV | TRAU | TPSU
Fred Barstein is the Founder & Editor-in-Chief of 401kTV. Fred is also the Founder and CEO of The Retirement Advisor University (TRAU), a collaboration with UCLA Anderson School of Management Executive Education and The Plan Sponsor University (TPSU).Mr. Barstein was also Founder and Editor-in-Chief of NAPA Net.
Fred Barstein

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