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Plan Sponsor Discusses Complexity of Running a 401k Plan


Running a 401k Plan

HR and finance professionals that run or are involved with their company’s retirement plan often have little time to get educated and even less time to speak with peers. They think they are the only ones struggling with the complex compliance issues of an ERISA plan like a 401k as well as getting employees to participate and benefit. At a TPSU program held at the university of Pennsylvania, Adjunct Lecturer Tim Dougherty discusses these issues with the accounting director of a 300 person healthcare company.

One of the big issues for HR and finance professionals is educating their investment committee who ultimately has the responsibility to make decisions and make sure the plan is compliant.  The accounting director attending the TPSU program had not realized the extent of the communications required to give to employees about the plan and he intends to go back to review them with his third party providers and advisor to hold them accountable as well as report back to the committee.

He also wants to make sure records are accurate. Speaking to a principle at another A principal at a TPSU Adjunct Lecturer firm noted that a great percentage of the signature ready 5500 forms prepared by service providers are inaccurate. Even though plan sponsors are ultimately responsible for the accuracy of these disclosures, they often just sign them without reviewing.

Because the employees of the healthcare company are younger, it’s hard to get them focused on retirement and participate in the 401k plan. Though auto-enrollment is well known to most industry professionals, plan sponsors busy with many other duties may not. The accounting director was not only impressed with the data showing the improvement in participation rates for plans using auto-enrollment, he was comforted to hear from other plan sponsors using it.

Educating plan sponsors about their fiduciary duties and bringing best practices is critical for the success of our retirement system. Most important is giving people a chance to speak to peers to know they are not alone in their struggles but also to hear what other companies like them are doing to improve outcomes.

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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