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Target Date Funds and Fiduciary Obligations

Target date funds (TDFs) – which rebalance investments to become more conservative as a fixed date approaches – are a convenient way for plan participants to diversify their portfolios and reduce volatility and risk as they approach retirement, making them an increasingly popular choice. However not all TDFs are created equal, and selecting and monitoring them can pose unique challenges for plan sponsors and fiduciary advisors. TDFs were first introduced in 1994. A little over ten years ago, just…

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Use Plan Analytics to Evaluate Your Retirement Plan

Your retirement plan is a valuable resource for your employees and serves as a vehicle to attract and retain top talent. Ensuring plan success is crucial. Examining plan analytics can help evaluate its success. Plan analytics you should explore: Median age, tenure and savings rates of plan participants These analytics can be helpful to determine which age groups are not strongly participating and may be encouraged to do so via on-site meetings, focused mailings and other communication and education….

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Too Many Choices: How Many Investment Options Should You Offer?

Many plan providers 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 administration associated with the plan. Choice Overload In a study on retirement plan options, researchers concluded that it is possible to…

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Improve your Retirement Plan by Encouraging Employees to Join

Many organizations face the problem of increasing employee participation in their retirement plans. Participation is crucial to the success of the plan, and it improves employee retention and overall job satisfaction – but how can plan sponsors improve participation rates? Design Your plan needs to meet the needs of your employees and your company. Employee matching contributions, waiting periods for new employees, loan or hardship withdrawal options, investment options, and more should be structured to make it easy for…

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Why CFOs Should Consider Partnering with a Retirement Plan Advisor

Many companies are outsourcing more and more activities, mainly because outsourcing can provide cost savings and increase productivity. Outsourcing allows companies to focus more on their core businesses, rather than spending time on areas outside their expertise. For retirement plan sponsors, outsourcing services makes sense for these reasons as well as others. Reduced Risks As a plan sponsor, you and your company are plan fiduciaries, and can be held legally responsible for the plan’s administration and performance. Many sponsors…

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Financial Wellness and Productivity: How are your Employees Affected?

Employees worried about their personal finances are less productive, more distracted and are easier targets for poachers. While none of that is a revelation, a recent nationwide survey showed just how pervasive financial insecurity is in the workforce and how large the losses and potential risks are for employers at every level. When asked what they feel stress about, 59% of respondents said personal finances were their number one concern. Other familiar stressors paled in comparison — “my job”…

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Four Tips for Increasing Your Retirement Dollars

1.          Don’t Cash Out Retirement Plans When Changing Employment When you leave a job, the vested benefits in your retirement plan are an enticing source of money. It may be difficult to resist the urge to take that money as cash, particularly if retirement is many years away. If you do decide to cash out, understand that you will very likely be required to pay federal income taxes, state income taxes, and a 10 percent penalty if under age…

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Top Ten Fiduciary Responsibilities

A plan fiduciary plays an important role in the organization’s financial health. Not only do they oversee the fiduciary process, but they identify and serve the best interests of a retirement plan’s participants and beneficiaries. Here are 10 important responsibilities to keep in mind. Limit liability: As a fiduciary, it is imperative that you understand ERISA so you can keep yourself and your business safe from liability. Find the right plan provider: Finding a retirement plan provider is much…

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The More You Know: Automatic Enrollment Notices

Many retirement plans today provide automatic enrollment for employees, meaning the plan sponsor initiates enrollment into the retirement plan on behalf of the employee. One common question plan sponsors come across is whether their enrollment kit satisfies the annual automatic enrollment notice requirement. At first glance, it may seem that enrollment kits contain all the necessary information to satisfy your obligation to provide an annual notice of your plan’s automatic enrollment feature, however the notice must include the following…

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The Benefits of Matching Retirement Contributions

As the unemployment rate has dropped, hiring has grown increasingly competitive – especially for businesses with highly-specialized positions. It’s important to understand how retirement matches factor into the hiring process and how they can financially benefit your company. Here are a few reasons why offering a retirement match helps your business. Competitive Hiring If you don’t offer a retirement match, chances are your competitors do, meaning it’s more difficult to attract top talent. A full benefits package that includes…

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