Bells and whistles not being used is worse than having no bells and whistles

My wife will admit I am a dutiful husband. For years, I have been forced from sleep to stand online for Black Friday sales. One year, I stood on line at Sports Authority for the 5 am open to buy a treadmill. A treadmill is great exercise equipment as long as it’s being used. Thanks to where it was sitting in our den, it was used primarily to hold clothing and everything else, but used for its intended purpose. The treadmill died during Hurricane Sandy. So I ended up buying an elliptical machine, which is rarely used as well. The point is that when you go through the trouble of having something that’s good for you, it doesn’t mean anything if you don’t use it.

Many plan providers are a little flashy when it comes to the services they offer. They may give you a large binder that details everything the plan sponsor should do as fiduciary. Some may develop investment policy statements (IPS) for their client that reads like a treatise or develop an education policy statement that will lay the plans on how plan participants will be educated for participant direction of plan investments.  The problem is that these things are useless if it’s not being used. Quite honestly, having these apparatuses and not using them is worse than not having them all.

For an example, an IPS is not legally required even though Department of Labor agents do ask plan sponsors if they have them. What is worse: not having one or having one that’s not being used? I would suggest that any bells and whistles that a plan provider offers are far worse than not having those bells and whistles.

So a plan provider that offers something that the competition isn’t offering should make sure the plan sponsors are actually using those bells and whistles.

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