Is It Time to Reassess Your Retirement Plan?

As savings vehicles, employer-sponsored retirement plans, such as the 401(k) plan, are convenient, tax-efficient and can provide your employees with an unparalleled opportunity to improve their retirement readiness and create a better future.

But at the same time, retirement plans are highly complex — and not all providers are created equal. Due to the little-known, technical nature of retirement plan services and the ever-changing regulatory environment, some providers are able to make false promises to gain your business, leaving you none the wiser.

As a plan sponsor, you’ve accepted the fiduciary responsibility to run your business’s retirement plan and help your employees achieve their goals for the future. But this responsibility goes beyond plan oversight. It means your plan fees must be fair and reasonable. It means your plan investment options must be diversified and sound. And it also means the decisions you make must be thorough and documented. Therefore, it’s important that you hold your provider accountable and ask the right questions to help ensure your plan is fully compliant and delivers the greatest value to your employees.

So, how can you steer clear of deception? Watch out for these common, false claims put forth by providers in the retirement plan marketplace today.

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1. “What fees? Your retirement plan is free.” There is no such thing as a “free” retirement plan. Moreover, the structure and price of retirement plans can vary widely across the industry. It’s important to ensure that the fees you’re paying are not only disclosed to you, but are outlined to your employees, as well. If your provider is not giving you complete transparency over your plan fees, it may be time to find a new solution.

2. “Our online, retirement plan platform is simple. Setup only takes a few minutes!” Over the past several years, the rise of online financial services has generated considerable buzz across all aspects of the industry. Some of these platforms tout time savings and “efficiency” as key benefits to draw in potential clients. But the reality is that effective and sophisticated plan design does take much-needed time and due diligence.

Your provider should be well-versed in the regulatory and legal nuances of the retirement plan space, and should also spend the hours necessary to ensure that your plan is designed to meet those requirements. This process can’t be (and shouldn’t be) accomplished with the click of a button.

3. “Your retirement plan is on autopilot —  upkeep isn’t necessary.” It is imperative that you review your retirement plan on a regular basis to reduce risk and ensure that it continues to meet the evolving needs of your employees. This includes your plan’s investment lineup, trends in participation and contribution rates, and fee benchmarking, among others. If your provider doesn’t offer this service, you should think twice before continuing the relationship.

4. “I’ll assume all of your fiduciary liability.” No matter what your provider tells you, it is impossible to “outsource” your fiduciary responsibility to a third party. And in fact, fulfilling your fiduciary duty isn’t as daunting as it may seem — so long as you follow a few best practices and retain the support of an experienced advisor.

A healthy dose of caution can go a long way when it comes to selecting and keeping your retirement plan provider. Failing to be diligent not only puts your business at risk; it can hurt your employees, too.

Does your retirement plan need a check-up? Contact our team to sign up for a complimentary plan analysis today.

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Hewins Financial Advisors, LLC d/b/a Wipfli Hewins Investment Advisors, LLC (“Hewins”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. Hewins is a proud affiliate of Wipfli LLP. Information pertaining to Hewins’ advisory operations, services and fees is set forth in Hewins’ current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. The views expressed by the author are the author’s alone and do not necessarily represent the views of Hewins or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Hewins, and Hewins does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Hewins of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional. Hewins does not provide tax, accounting or legal services.
Erika Young
Erika Young

CRPS®, CPFA, AIF® | Principal, Director of Employer Plan Services

Erika Young, CRPS®, CPFA, AIF®, is a Principal and the Director of Employer Plan Services at Wipfli Hewins Investment Advisors, based in Madison, WI. Erika specializes in retirement plan design and assessment for start-up companies, nonprofit organizations and small-to-medium-sized businesses. She also provides expertise on ERISA compliance, reporting and regulatory standards.

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Is It Time to Reassess Your Retirement Plan?

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