Most companies that have a 401k or 403b plans have a dedicated HR person to handle, among other things, their retirement plan. But some companies, especially professional service firms like architects, rely on the firm’s partners to run their plan. At a TPSU held at Manhattanville College, a partner at an architectural firm describes his struggles to understand the 401k world and how he intends to redesign his plan.
Of the 70 employees at the firm, only 50% are participating so the partner, who is also the plan’s administrator, is considering instituting auto-enrollment which is highlighted at most TPSU programs. In the past, the partner did not want to be paternalistic thinking that employees are responsible for their retirement and that the company’s only duty is to offer them the opportunity to save. Now he is thinking about becoming more proactive by using some of the auto-plan features.
Presenting at the Manhattanville TPSU was Hugh O’Toole from Viability AG which calculates the inherent liability that companies carry with employees not able to retire on time. This issue hit home with the architect firm which, like other professional groups have older employees as people are able to work at an older age. Some older workers are still productive but many, concerned about their financial security, continue to work into their 70’s which may be good for them but might increase costs for the company and limit opportunities for younger professionals who may be forced to leave.
The issue was new to the partner at the architectural firm and caused him to look at his retirement plan in a new light. In fact, the Manhattanville program raised so many new issues, including the 401k fee structure, that the architect who, though well educated in a complicated field, realizes that he needs help and will immediately call his advisor to review his firm’s plan
