Are you aware that you may not be optimizing your 401(k) plan to its full potential? As a plan sponsor, you’ll want to examine all of the possible strategies to implement in order to reap the greatest benefits from investing in a qualified retirement plan.

 One of the most important ways to ensure that you are maximizing your retirement plan opportunities is by working closely with an advisor who will design a custom plan for you and your employees. Avoiding cookie-cutter plans and having a personalized design in place will give you the tactics you need to navigate to a successful retirement plan.

 In this blog, we will dive into five key areas where you may be able to improve your plan by working with a retirement plan advisor.

1. Retirement Plan Design

Your business is not the same as the business across the street, so why would you have the same, off-the-shelf retirement plan design as they do?

The right design for your company’s retirement plan begins with your retirement plan advisor understanding the ins and outs of your company. This includes everything about your business, your workforce and company goals. Creating a plan for you and your employees means that you should recognize their demographics, culture and understand the financial literacy with your workforce. An advisor should take all of these factors into consideration when designing your plan.

2. Retirement Plan Administration

Managing a qualified retirement plan is a full-time job and its best left in the hands of professionals who have experience working with retirement plans on a daily basis. The Employee Retirement Income Security Act (ERISA) is a complex, federal law that governs qualified retirement plans and failure to follow its provisions can result in severe consequences – even plan disqualification.

 Imagine the frustration when you’re dealing with urgent issues and your big-box retirement plan advisor, who only provided a 1-800 number, connects you to a call center where you may or may not be able to reach an expert in a timely manner. When deciding on a retirement plan advisor to work with, it is very important to ask about their plan administration capabilities and customer support options for helping you deal with problems and issues.

3. Investment Consulting and Fund Selection

Countless – that is the number of mutual funds to choose from for inclusion in your 401(k) plan’s investment menu.

Following a disciplined approach when selecting a fund line-up includes quantitative and qualitative analysis of available funds. The right plan advisor will not only look at short-term performance, but also longer-term risk-adjusted measurements as well. In addition, he or she will understand the qualitative side of an actively managed fund, which can result in better fund selection decisions.

Whether you decide to include active funds, passive funds or both, it’s important that the advisor has a process for selecting and monitoring the funds in an investment lineup.

4. Fiduciary Compliance

As the sponsor for an employee retirement plan, you are legally required to put the interests of plan participants first in all decisions you make about your company’s retirement plan.

The fiduciary of an employee retirement plan is the person who exercises discretionary control over the plan or its assets. The ERISA standard of a retirement plan fiduciary is that you act prudently and in the sole interest of plan participants at all times.

Fiduciary responsibilities involve more than choosing investments. It also applies to anyone who:

• Exercises discretionary authority over the plan or management of the plan assets,
• Renders investment advice for compensation with respect to plan assets, or
• Has the discretionary authority or responsibilities for plan administration, including payment of benefits from the plan.

5. Participation Communication

Our final strategy for retirement planning success includes strong participant communication and education. Participant communication should emphasize the following desired end results of retirement planning for employees: achieving a positive retirement outcome by saving enough money and investing it wisely.

 Your message should not only be about the mechanics of how the plan works, but also about how the plan can benefit your employees. By having an action-oriented communication strategy, you can inspire your employees to create a plan to save as much money as possible.

 A policy for good communication is choosing a message and medium that is tailored to your workforce demographics. In addition, it’s a good idea for plan sponsors to host periodic retirement plan education meetings. This is a great opportunity to emphasize the benefits of plan participations and give employees an option to enroll on the spot.

Choosing the right retirement plan advisor is the best place to start when implementing successful retirement saving strategies for your company and employees. Working closely with a retirement plan advisor who specializes in the design and administration of tailored retirement plans is best in meeting your company’s goals.

 At ACG, we will work with your CPAs, attorneys and other advisors to get broad perspectives on your business. Based on all of this input and data, we will design a retirement plan that will be the best for you, your company and employees.

Contact ACG to learn how we can review all of the possibilities of your retirement plan.

Interested in learning more now on how to improve your plan with your business and employees in mind? Download our complimentary eBook below to make sure you are getting the best benefits from investment in a qualified retirement plan.