The Rosenbaum Law Firm P.C. Blog

I used to think it was random. Watching mediocre people get pushed forward at work and in life, I figured maybe I was missing something. Maybe there was a skill I didn’t see, something behind the curtain that explained it. The older I get, the more I realize it’s not random at all. It’s intentional, or at least it functions that way.

Comfort Over Competence

Certain personalities don’t surround themselves with the best people. They surround themselves with the safest people. The ones who won’t question, won’t challenge, won’t outshine. Mediocrity in that environment isn’t a flaw, it’s a feature. It creates comfort. It removes friction. It protects status. The truly capable don’t fit that mold. They ask questions, they see gaps, they don’t need constant validation. That makes them harder to manage and, to the wrong person, a threat.

The Pattern Shows Up Everywhere

You start to see it in places you didn’t expect. In families, where underachievement gets reframed as potential while actual achievement gets ignored or minimized. In business, where someone ineffective gets labeled a “superstar” because they’re loyal, agreeable, and non-threatening. I’ve seen it with people who did nothing for years being championed, and others who failed repeatedly still getting support, while stronger performers were sidelined. At some point, you stop calling it coincidence.

Loyalty Disguised as Success

What gets built in these environments isn’t excellence, it’s a circle of loyalty. The message is subtle but clear. Stay in line, don’t disrupt, and you’ll be rewarded. Push too hard or stand out too much, and you become a problem. Over time, that gets sold as success. Titles get handed out, praise gets inflated, and the outside world is expected to believe it’s merit-based.

Once You See It

Once you see the pattern, you can’t unsee it. That doesn’t mean every situation is driven by it, but enough are that it changes how you interpret what’s happening around you. The real question isn’t whether it exists. It’s what you do once you recognize it.

I’ve always liked immediate eligibility for deferrals. Clean, simple, easy to explain. Let people in the door and let them start saving. Where things go sideways is when a provider layers on a safe harbor contribution, a match, or even profit sharing, and no one stops to revisit eligibility for employer money. That’s where “sounds good” turns into “why is this so expensive?”

Deferrals Are Not Contributions

Immediate eligibility for deferrals works because it’s participant-driven. If they don’t defer, there’s no cost. Employer contributions are different. A safe harbor non-elective, a match, a discretionary profit sharing contribution, those are plan costs. If eligibility for those contributions mirrors deferral eligibility, you may have just expanded your cost base to include every employee, including part-timers you never intended to fund.

The Question That Doesn’t Get Asked

Here’s the problem I see over and over. Providers recommend adding a safe harbor feature to solve testing, or a match to drive participation, but they don’t ask the one question that matters: should eligibility for employer contributions be different from deferrals? If that conversation never happens, the default design often sweeps in more employees than the sponsor anticipated. That’s not a compliance failure, it’s worse, it’s a budget surprise.

Small Design Choices, Big Dollar Consequences

Eligibility is one of the simplest levers in plan design, and one of the most overlooked. A one-year of service requirement for employer contributions can dramatically change cost without taking anything away from your core goal of letting employees defer immediately. Instead, sponsors end up funding contributions for short-term or part-time employees because no one slowed down to align the design with intent.

The Bottom Line

Immediate eligibility for deferrals is smart. Extending that same eligibility to employer contributions without thinking it through is not. Plan design isn’t about adding features, it’s about understanding the cost of every decision before it shows up on your balance sheet.

The most expensive calls I get usually start the same way. “Our payroll provider handles the TPA work too, and something went wrong.” Contributions were missed, eligibility was misapplied, or the match didn’t follow the document. The assumption is that bundling payroll and TPA eliminates errors. In reality, it often hides them until it’s too late.

One System, One Interpretation, One Point of Failure

When the same provider runs payroll and administration, everything flows through a single system and a single interpretation of the plan document. That sounds efficient, until the setup is wrong. If eligibility is coded incorrectly or compensation definitions don’t align with payroll fields, the error repeats every pay period. There’s no independent TPA catching the issue because the same entity created it. What looks like integration is often just duplication of risk.

Plan Design Still Has to Fit the System

Sponsors assume the bundled provider will translate the document into something workable. That’s not how it works. The system is built to handle standard designs. Once you layer in complex eligibility, non-standard compensation, or nuanced matching formulas, you’re relying on configuration, not expertise. If the design doesn’t match how payroll actually runs, the system won’t fix it. It will process it wrong, consistently.

Delegation Doesn’t Change Liability

The biggest misconception is that bundling services shifts responsibility. It doesn’t. Under ERISA, the plan sponsor owns the result. When errors happen, it’s the sponsor writing the check for corrective contributions and explaining it to participants. The provider may help fix it, but they’re not absorbing the liability. That’s the part no one focuses on during the sales process.

By the Time You Call, It’s Cleanup

By the time the issue surfaces, it’s already expensive. Now we’re talking about corrections, earnings, notices, and time spent unwinding months or years of bad data. The fix isn’t finding a better cleanup process. It’s making sure the plan design actually works within the system before it ever goes live. Because when payroll and TPA are the same shop, there’s no second set of eyes coming to save you.

The latest executive order aimed at expanding retirement savings sounds like a win on paper. Millions of Americans without access to workplace plans are now being nudged into the system through simplified IRA access, a new federal matching contribution, and a centralized enrollment concept. The pitch is straightforward: if your employer doesn’t offer a 401(k), the government will help you get into something close. For an industry that has spent decades talking about the coverage gap, this is a meaningful policy shift. A large segment of the workforce still lacks access to a retirement plan, and this initiative attempts to close that gap with a mix of incentives and private market solutions.

Access Isn’t the Same as Participation

Here’s the issue. Access has never been the real problem, participation is. People can already open IRAs today, but they don’t. There’s no payroll deduction, no auto-enrollment, and no inertia working in their favor. This effort tries to simplify the process, but it still relies on individuals to take action. Without automatic enrollment or contribution escalation, you’re asking the same group that isn’t saving today to suddenly become disciplined investors. That’s not how behavior works. Even with a federal match in the mix, the hurdle remains the same, getting people to actually contribute and stay consistent.

This Is a Public-Private Experiment, Not a Fix

This isn’t a government-run plan, it’s a marketplace. Workers are pointed toward options offered by private providers, ideally with lower fees and simplified investment choices. That sounds familiar because it mirrors what already exists in the IRA world, just with more visibility. The hope is that standardization drives adoption. The risk is that it becomes another layer in an already fragmented system where no one truly owns the outcome.

The Bottom Line

This initiative is directionally right but structurally incomplete. It recognizes the access problem but doesn’t solve the participation issue. Until policy leans into automatic features, the gap between having an account and actually saving isn’t going anywhere. And that gap is everything.

There’s a certain strain of thinking in this business that more is better. More funds. More features. More “solutions.” If a lineup has 18 options, someone will suggest 28. If the platform works, someone wants to bolt on three more tools. It feels like progress.

It’s not. It’s clutter.

Plan sponsors don’t wake up in the morning saying, “You know what I need? Another small-cap fund and a new financial wellness widget.” They want fewer problems. Fewer participant complaints. Fewer operational headaches. Fewer things that can go wrong when payroll hits on Friday afternoon.

Every additional choice creates complexity. More funds mean more monitoring, more documentation, more chances that something underperforms and raises questions. More features mean more education, more confusion, more calls from participants who don’t understand what they just signed up for. Complexity doesn’t scale—it multiplies.

And participants? They don’t reward you for it. Give them too many options and they freeze. Or worse, they make bad decisions. That’s not empowerment—that’s abdication.

I’ve seen plans with “robust” menus that look like a Cheesecake Factory binder. Everything’s there. Nothing’s clear. And the sponsor is stuck defending why half the lineup exists.

Simplicity isn’t lazy. It’s disciplined.

A clean, well-structured lineup. A QDIA that does the heavy lifting. Features that actually get used. That’s what works. Not because it’s flashy, but because it’s manageable—and defensible.

Providers love to sell more because more sounds valuable. Sponsors live with the consequences.

So the next time someone pitches you on adding another layer, ask a simple question: does this solve a real problem, or just create a new one?

Because in this business, the best plans aren’t the ones with the most options.

They’re the ones with the fewest regrets.

Everyone loves a “partner” who agrees with them. Until it blows up.

In the retirement plan world, there’s a dangerous kind of service model—the nod-and-smile model. Sponsor says they want a bloated investment lineup? “Sounds great.” Wants to keep a high-cost legacy fund because someone on the committee likes it? “No problem.” Doesn’t want to deal with fees or benchmarking this year? “We can revisit later.”

That’s not partnership. That’s order-taking with better branding.

Real partners push back. Not to be difficult, but to be useful. Because sometimes the right answer is uncomfortable. Fees are too high. The lineup is a mess. The plan design isn’t helping participants. The process—if we’re being honest—is hanging on by a thread.

And here’s the thing: sponsors don’t always know where the risk is. That’s why they hired you. If all you’re doing is validating bad decisions, you’re not reducing risk—you’re participating in it.

I’ve seen this movie before. Everything looks fine while the market is up and no one’s asking questions. Then something happens—a lawsuit, an audit, a participant complaint—and suddenly all those “we’ll let it slide” decisions get put under a microscope. That’s when the silence from providers becomes deafening.

Good providers speak up early. They explain why something doesn’t make sense. They document the conversation. They offer alternatives. And yes, sometimes they make the room a little uncomfortable.

That’s the job.

Because being a partner isn’t about being liked in the moment. It’s about being respected when it counts. It’s about protecting the plan sponsor from risks they don’t see—or don’t want to see.

If you’re not willing to push back, you’re not a partner.

You’re just along for the ride.

Plan providers think they win the business at the RFP. Nice presentation, polished deck, competitive pricing. Everyone shakes hands, everyone’s excited, and the deal is done.

Not even close.

The real sale happens during implementation. And sponsors remember those first 90 days forever.

Because that’s when theory meets reality. Payroll feeds don’t line up. Census data is messy. The timeline slips. Emails go unanswered for a day too long. What looked seamless in the pitch suddenly feels… clunky. And once that doubt creeps in, it doesn’t go away.

You don’t get a second first impression in this business.

Sponsors aren’t judging you on your capabilities—they’re judging you on your execution. Did you hit deadlines? Did you communicate clearly? Did you anticipate problems before they became fires? Or did the client feel like they had to quarterback their own conversion?

A messy implementation doesn’t just create operational risk. It creates emotional distrust. And that’s the kind of thing that sits in the back of a sponsor’s mind for years, just waiting for the next mistake to confirm their suspicion that they hired the wrong provider.

The irony is that most providers pour their best resources into winning the business, not onboarding it. That’s backwards. The handoff from sales to implementation is where relationships either solidify—or start to crack.

Clean conversions build credibility. Sloppy ones create scars.

If you want retention, referrals, and long-term clients, treat implementation like it actually matters. Over-communicate. Under-promise. Hit your deadlines. Own your mistakes fast.

Because by the time the plan goes live, the sponsor has already decided what they think about you.

And it’s really hard to change that verdict later.

Plan sponsors spend a lot of time worrying about the market. Is it too high? Too low? Are we heading into a recession? Should we swap out funds before the next downturn? It’s a natural instinct—but it’s also the wrong place to focus your fear.

Markets go up and down. That’s not a fiduciary failure. That’s Tuesday.

What actually gets plan sponsors in trouble isn’t performance—it’s process. Or more accurately, the lack of one.

No one gets sued because a target date fund had a bad year. They get sued because there was no documented reason it was selected in the first place. No benchmarking. No monitoring. No discussion in committee minutes. Just a lineup that “looked fine” until it didn’t.

That’s the difference. Fiduciary responsibility isn’t about predicting outcomes. It’s about demonstrating a prudent process.

Did you review your investment options regularly? Did you benchmark fees against comparable plans? Did you document why you kept—or replaced—a fund? Did your committee actually meet, or just exist on paper?

If the answer to those questions is fuzzy, that’s your real risk—not whether the S&P 500 drops 15%.

The irony is that sponsors chase performance like it’s the scoreboard, when regulators and courts are looking at the playbook. They want to see discipline. Consistency. Evidence that decisions were made thoughtfully, not reactively.

A bad process during a good market is still a bad process. You just don’t notice it until the tide goes out.

So stop trying to outguess the market. You won’t win that game.

Instead, build a process you can defend in a conference room, in an audit, or in a courtroom. Because when things go wrong—and eventually they will—it’s not your returns that matter.

It’s your receipts.

Plan sponsors love a good illusion. And the biggest one in the 401(k) world is this: if the recordkeeper is doing a lot, they must be responsible for a lot. They’re not.

Recordkeepers are service providers. Very important ones. They handle transactions, participant accounts, websites, statements, and enough moving parts to make your head spin. But none of that makes them a fiduciary—at least not in the way that matters when things go sideways.

The problem is they don’t always look like vendors. They present investments. They show up to committee meetings. They hand you reports with charts and colors that scream “we’ve got this covered.” Over time, it’s easy for a plan sponsor to mentally outsource responsibility. That’s where the trouble starts.

Because when there’s a bad fund lineup, excessive fees, or a participant lawsuit, the recordkeeper isn’t the one in the hot seat. You are.

Unless you’ve formally hired a discretionary fiduciary—like a 3(38) investment manager—the decisions are still yours. Even if the recordkeeper “recommended” the funds. Even if they built the lineup. Even if they said, “this is what most plans do.” None of that transfers liability.

This isn’t about distrust. Most recordkeepers are trying to be helpful. But helpful isn’t the same as accountable. And confusing the two is how sponsors get burned.

A good process fixes this. Know who your fiduciaries are. Define roles clearly. Document decisions. Ask uncomfortable questions. And if you want someone else to take discretion, hire them properly.

Because in the end, when the music stops, the recordkeeper packs up their materials and goes home. The fiduciary? That’s still you.

Every now and then, the industry rolls out a headline that sounds like it belongs in a late-night infomercial. “Boost your retirement income by 30%.” No extra savings. No extra work. Just one simple tweak.

This time, the hook comes from findings highlighted by TIAA—suggesting that retirees who manage withdrawals themselves, instead of locking into more structured income approaches, can generate meaningfully higher income. On paper, the math works.

But let’s slow down for a second.

Yes, if you change how you withdraw money—timing distributions, taking on more market exposure, maybe spending a little more early—you can increase income in the short term. That’s not innovation. That’s pulling dollars forward.

And when you pull dollars forward, you’re usually pulling risk forward too.

This isn’t free money. It’s borrowed comfort.

Because retirement isn’t about winning in year one. It’s about not losing in year twenty. And that’s where these “boost your income” strategies start to crack. They rely on discipline. They rely on markets cooperating. They rely on participants behaving rationally when things get rocky.

That’s a tough bet.

We all know how participants actually behave. They chase returns when things are good. They panic when things are bad. They sell low and regret it later. Giving them a “do-it-yourself income strategy” and expecting consistent execution is wishful thinking.

The TIAA findings are interesting. But they’re based on models, not emotions.

Plan sponsors shouldn’t be chasing optimization headlines. They should be building systems that survive real-world behavior. Managed accounts. Thoughtful income defaults. Guardrails that protect participants from themselves.

Because retirement income isn’t about squeezing out an extra 30%.

It’s about making sure the money is still there when it actually matters.