Speaking English Does Not Always Result in Effective Communication. Do you enjoy a strong rapport and good communication with your retirement plan advisor, or, is it difficult for you to comprehend what your advisor says, means or needs? Most plan sponsors partner with a retirement plan advisor. Are they communicating with you and your retirement committee in terms that you and your committee members understand? If not, it may be time to have a face-to-face conversation that levels the playing field.
Do you enjoy a strong rapport and good communication with your retirement plan advisor, or, is it difficult for you to comprehend what your advisor says, means or needs? Most plan sponsors partner with a retirement plan advisor. Are they communicating with you and your retirement committee in terms that you and your committee members understand? If not, it may be time to have a face-to-face conversation that levels the playing field. Plan fiduciaries are busy people. With so much on your plate, you can’t possibly plug into everything that’s going on with your plan and be expected to understand the minutiae. That’s where working with a knowledgeable retirement plan advisor can make the difference for you. A knowledgeable retirement plan advisor can provide valuable input on plan investments, participant communication, financial wellness, loans, revenue sharing and fiduciary responsibility etc. After all, ERISA does not require that if you be an expert at handling certain elements of your plan. ERISA permits you to hire professionals who can do it adeptly for you, or along with you. However, if you cannot understand what they’re saying to you, that probably isn’t very helpful at all.
Last month, Christopher Carosa penned an article for BenefitsPro reminding retirement plan advisors to “keep it simple” when engaging with plan sponsors. The articled stressed that advisors need to avoid jargon, keep their explanations short and sweet, and in his words, “avoid bull.”
There’s nothing wrong with telling your advisor — or any of your plan service providers for that matter — to slow down and explain things in a manner you can follow. I think those of us who are steeped in the industry forget that not everyone lives, breathes and speaks the language of ERISA and defined contribution (DC) plans. Again, if it’s a foreign language to you, that’s fine. But in that case, it’s important to make sure you have a good translator. That should be your plan advisor or possibly other service providers, like your recordkeeper or TPA.
That said, it’s important to stay sharp. In other words, sure, you trust your vendors, but make sure that trust isn’t blind. The downside of not being 100% “in the know” is that there is potential for sponsors to be taken advantage of, in the form of excessively high fees being charged for services rendered, and/or being talked into adding services or features to your plan that don’t really benefit the plan participants. That can lead to fiduciary breaches, increased liability, and unfortunately, that falls on you. Put another way, as a plan fiduciary, it’s ultimately your responsibility to make sure your plan fees are reasonable, and that the services being provided are necessary, valuable and in your participants’ best interests.
This isn’t meant to scare you. On the contrary, this is meant to remind you to look out for yourself, your participants and your plan, and make sure you and your vendors are on the same page. That can’t happen if you don’t speak the same language, so again, it’s important to make sure that you understand each other with crystal clarity. And if your advisor and plan service providers can’t (or won’t) give it to you straight, it might be time to look for new ones who will.
The Plan Sponsor University (TPSU) understands the need to effectively communicate with plan trustees in plain English as well as anyone. (View a list of upcoming TPSU Programs here)
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