Spring Cleaning

Spring Cleaning

March 06, 2024

How to Tidy Up Your Plan and Make Sure You're Covering All the Bases

Spring isn’t just a great time to clean up your attic, basement, garage, closet or yard. It’s a great time to tidy up your retirement plan and make sure you’re covering all the bases as a plan sponsor.

Here are some key areas to focus on:

  • Regular Plan Review. Conduct periodic reviews of the plan’s features, investment options, fees and administrative procedures. These reviews ensure alignment with the plan’s objectives and compliance with regulatory changes. It also helps you maintain a competitive edge when it comes to recruiting and retaining quality employees.

  • Fee Benchmarking. Compare the plan’s fees against industry standards to ensure they are reasonable and in the best interest of participants.

  • Fiduciary Responsibilities. Maintain a clear understanding of fiduciary duties and regularly document decisions and processes. If you haven’t already, consider engaging a retirement plan advisor or consultant to help with investment selection and monitoring.

  • Participant Education and Communication. Make sure you are offering educational resources and tools to help employees make informed decisions about their retirement savings. Regularly communicate updates, changes and investment options to participants. Consider adding financial wellness resources and tools based on the needs of your employees.

  • Automatic Features and Default Options. If you haven’t already, consider implementing auto-enrollment, auto-escalation of contributions and appropriate default investment options to boost employee participation and savings rates.

  • Compliance with Regulations. Consider an annual compliance review to address any potential issues proactively. This foresight is especially valuable given the ongoing rollout of SECURE Act 2.0 provisions (both mandatory and optional).

  • Data Security and Privacy. Safeguard participant data by implementing robust cybersecurity measures. If you haven’t done so yet, review the DOL’s 2021 guidance, which provides best practices to help plan sponsors, plan fiduciaries, service providers and plan participants maintain a prudent cybersecurity program within the retirement plan framework.

  • Vendor oversight. Review service agreements with plan providers regularly to ensure they’re delivering on agreed-upon services efficiently and cost-effectively.

  • Plan Documentation. Ensure plan documents are up to date, accurately reflecting the plan’s operations and any changes in regulations or policies.

  • Plan Design Enhancements. Continuously evaluate the plan design to make adjustments that better meet the needs of participants, such as offering Roth contributions or other features that might align with their preferences.

  • Diversification and Investment Options. Evaluate and diversify investment options, providing a range of choices that align with different risk appetites and investment goals.

  • Retirement Readiness Assessment. Work with your plan advisor to regularly assess the plan’s effectiveness in preparing your employees for retirement. Consider tools or services that help employees understand if they’re on track for their retirement goals.

Informational Resources: A Plan Sponsor’s Responsibilities (irs.gov, June 5, 2023); DOL’s Cybersecurity Program Best Practices (Employee Benefits Security Administration, n.d.).

We are happy to help provide additional insight, feel free to reach out to me at joe@diversifiedfa.com or 800.307.0376.

_________________________________________________________________________________________________

Disclosure: This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. Investment Advice and 3(38) Investment Fiduciary services offered through Diversified Financial Advisors, LLC, a Registered Investment Advisor. 3(16) Administrative Fiduciary Services provided by PISTL Service Corporation. Discretionary Trustee services provided by Printing Industries 401k Trustees. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material. 

GRP-337-0224 (Exp. 02/25)