There are so many articles for plan sponsors (I’ve written quite a few) where they go on and on about what plan sponsors need for a successful 401(k) plan. Rather than go into a whole diatribe, here is a Reader’s Digest of what good 401(k) plans have:
- The leadership of the 401(k) plan understands their duty as plan sponsor and plan fiduciary.
- A third party administrator (TPA) who does a competent job in plan administration.
- A financial advisor who understands the retirement plan business and understands that their real role is minimizing the plan sponsor’s liability.
- A plan design that fits their needs, goals, and pocketbook.
- An investment lineup that isn’t too large that it increases participant confusion which depresses the rate of salary deferrals.
- Communication and technology that will get plan participants more engaged which would lead to higher participation.
- A review of costs and plan providers to make sure what works still actually does work.
- An ERISA attorney on call when they need them.
- An auditor (when the plan needs an audit) that gets the job done competently and ahead of any Form 5500.