The Rosenbaum Law Firm P.C. Blog

Vendettas in the retirement plan business don’t pay your bills. Disputes with other retirement plan providers don’t help grow your business. Years ago, I was invited by a dear friend in the business to speak at a local event for advisors and third-party administrators (TPAs). The top salesman from a local TPA that was a successor in interest to one I worked at, heard I was speaking there and told my friend that he wouldn’t show up because I was there. I think to this day, he might be upset that I blew the whistle on an accounting firm that was preparing audits that weren’t independent. That’s his problem, not mine.

I’ve made more friends in this retirement plan business than enemies. I’m sure my appetite for speaking my mind has ruffled a few feathers over the years, but that’s me.

The older I get, the more mellow I’ve become, yet there are situations over the past few years that have caused a range war here and there. While I think I stand for fee transparency and honesty in this business, that doesn’t help me with the folks who still want to operate like it’s 2010. For those folks, I’m a threat, I’m a danger and I get that. I think it matters to have a little perspective and when dealing with adversarial relationships, to figure out what the other side is thinking. If I was involved in a scheme to overcharge plan sponsors, I wouldn’t like someone like me.

Sometimes, the hero is the villain in a story and that just falls on whose perspective you’re looking at.

Broadridge Financial Solutions is launching an initiative to extend its Fi360 Accredited Investment Fiduciary (AIF) Designation Training to financial professionals from underrepresented groups at no cost. An industry of retirement advisors that is diverse will certainly help plan sponsors out.

Envestnet will sponsor an initial group of 100 advisors to receive free training through the program.

Individual retirement accounts (IRAs) remain the biggest segment of the retirement plan market, hitting almost $14 trillion in assets, thanks to 401(k) rollovers.

Over the past 10 years, IRA market share has increased from 31% to 38% and is expected to grow to 41% by 2027, according to  The Cerulli Report—U.S. Retirement Markets 2022: The Role of Workplace Retirement Plans in the War for Talent.

The growth in the IRA market is attributed to rollovers from defined contribution plans, with rollovers accounting for $2.9 trillion in IRA asset growth between 2016 and 2021.

That 401(k) National Virtual Conference returns in 2024. The two-day event will be held on Thursday-Friday, January 25-26, 2024.

Details for sign-up available soon.

With some great presentations and a lively roundtable, That 401(k) National Virtual Conference entertained and educated more than 50 plan providers on January 26-27^th. Presentations included a litigation update from Invesco’s Bill Schories and a SECURE 2.0 presentation from yours truly

Videos of the presentations can be found on our YouTube channel at https://www.youtube.com/channel/UCGhN0kEgc_PExtwzfC6NMZA

My latest article for JDSupra.com can be found here.

My latest article on. JDSupra.com can be found here.

I know two retirement plan providers in Federal prison for embezzling retirement plan assets. They did the crime, they are doing the time. However, there are times when people haven’t embezzled, but they have done enough troubling things, that people in government think they might have embezzled.

I knew a plan sponsor that the government thought they embezzled because of poor advice from a third-party administrator that it was OK to write a check from a defined benefit plan representing the owner’s benefit to another subsidiary, that was failing. Anytime there is a check from a plan to a company that sponsors the plan, that’s a clue to the government that something bad might be going on. Transactions between the plan and plan sponsor, as well as individuals, have to look above the board. Taking participant money and commingling it with corporate bank accounts is a recipe for disaster on the compliance end because it jeopardizes the tax-qualified status of the money and again, gives people the impression that something wrong has happened.

When you switch third-party administrators (TPAs), there is a lot of work involved. I don’t recommend switching TPAs if you don’t have to, but there are times you need to.

The problem is that there are TPAs out there that want you to set up a new 401(k) plan because it’s easier for them. What is easier for them, may not be easy for you. Your existing 401(k) plan may have loans and other things that are important for your employees. Creating a new 401(k) plan will create more headaches than you need since that means two Form 5500s and the need to figure out what you need to do with one plan.

Hiring a TPA is supposed to make it easier for you, not easier for them.

When things are going great, people are interested. When it isn’t, they aren’t.

A new survey of retirement plan sponsors, financial advisors, and plan participants show little interest among plan participants to invest their retirement assets in crypto.

Ubiquity Retirement + Savings survey reveals that only 3.5% of survey participants selected crypto as one of their preferred retirement savings asset classes, ranking them damn last among the investment offerings.

Other investment options are far more popular than crypto, including real estate at 33.2% and even gold, at 7.3%. Investing in a 401(k) (84%); other stock or bond investments (40.8%); and a savings account (36.8%) comprised the top three options for saving for retirement.