Category: Retirement Plan Sponsors

Welcome to Hey Joel! This forum answers plan sponsor questions from all over the country by our in-house former practicing ERISA attorney. Hey Joel, What’s the appropriate number of members and positions for a retirement plan committee? ~ Plannin’ in Pennsylvania Dear Plannin’, There is no specific guidance on the appropriate number of committee members. It’s important to have committee members who can contribute to the topics to be focused on. When there is one committee, as opposed to…

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Many plan sponsors struggle with deciding how many investment options to offer in their retirement plans. While people generally like to have lots of options when making other decisions, having too many plan options can potentially lead to poor investment decisions by plan participants. In addition, increasing plan options can also increase plan costs, as well as the administrative paperwork associated with the plan. In a study on retirement plan options, researchers concluded that it is possible to present…

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As a retirement plan sponsor, you want your employees to save the most they can in order to reach their maximum retirement potential. A significant amount of research says that you can improve both employee participation and their saving rates. Here are four ways you can help your employees start building a confident retirement: 1. Boost employee participation with automatic enrollment. Choosing to automatically enroll all new employees in your retirement plan can dramatically improve your participation rates. According…

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Welcome to Hey Joel! This forum answers plan sponsor questions from all over the country by our in-house former practicing ERISA attorney. Hey Joel, Should we consider life insurance in our retirement plan? ~ Beefin’ up my plan in Buffalo   Dear Beefin’, I’m not a fan of having this type of “investment” within a retirement plan. I often explain my position by asking a client what the purpose of their retirement plan is. Most will answer that it…

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Loss aversion sounds like a good thing — trying to avoid losing. What could be wrong with that? Unfortunately, if taken too far, it can actually be a threat to retirement plan participants’ long-term financial health. Loss aversion is the tendency to prefer avoiding potential losses over acquiring equal gains. We dislike losing $20 more than we like getting $20. Yet, this common bias can come with a heavy cost. Excessive risk avoidance can hurt participants when, for example,…

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Michael Viljak, Manager, Advisor Development Do you have employees in a prior employer’s retirement plan? Should they transfer these assets to a personal IRA or into your employer-sponsored retirement plan? Review the pros and cons of an individual retirement account (IRA) versus consolidating into the current retirement plan with your employees to help them make this decision. 1. Performance results may differ substantially. As an institutional buyer, a retirement (401(k), 403(b), 457, etc.) plan may be eligible for lower…

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Welcome to Hey Joel! This forum answers plan sponsor questions from all over the country by our in-house former practicing ERISA attorney. Hey Joel, My client wants to conduct an RFP for an ERISA attorney, what are important questions they should include? ~ Questioning the Expert   Dear Questioning, While it is a somewhat unusual step to formally RFP for an ERISA counsel search, it can be a good exercise to ensure your client finds the best fit for…

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All too often, retirement planning success is measured purely by financial metrics: savings amounts (15 percent per year), income replacement ratios (75 percent of preretirement income), or withdrawal strategies (4 percent per year). And the most critical part of planning for retirement is forgotten: the plan itself. Put another way: how can an employee know how much money they’re going to need in retirement if they don’t know what they’re saving for? Seventy-four percent of 50-59-year-olds have made a…

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Bill Tugaw, Governmental Plan Practice Leader The U.S. Department of Labor (DOL) recently issued benefit plan guidance and relief for plans and participants affected by the 2018 California Wildfires. The DOL recognizes that plan sponsors and participants may be affected in their ability to achieve compliance with various regulatory requirements. The guidance generally applies to all parties involved in employee benefit plans located in areas identified by FEMA as disaster areas, listed here: www.fema.gov/disasters. The guidance provides relief from…

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Six Easy Steps to Keep Your Plan Assets Safe Joel Shapiro, JD, LLM, Senior Vice President, ERISA Compliance Cyber fraud is a growing concern globally. Individuals are typically very careful to keep their bank account and email authentication information safe, but they aren’t always smart with the rest of their personal information. Participants need to be vigilant with their retirement savings accounts as well. In the past year we’ve seen a slew of cases of attempted fraud – some…

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