We\u2019ve been conditioned in life that everything is about results. I know from law school the hard way how much that first job relied so much on grades. Businesses are so concerned with the bottom line and we know how sports teams are fixed on wins and losses.<\/p>\n
When it comes to retirement plans, results and the bottom line are kind of meaningless if you think about it. A participant\u2019s rate of return isn\u2019t as important as whether the plan puts a participant in a position to make informed investment decisions if the participants directs their investment in a retirement plan.<\/p>\n
The participation rate of the plan isn\u2019t as important as whether the compliance tests are run correctly.<\/p>\n
The bottom line here is that Plan sponsors need to understand that when it comes to a retirement plan, it\u2019s all about the process and less about the result. I will tel you that when the Internal Revenue Service and\/or Department of Labor audit a plan, they never look at the rate of return for the Plan. What they look at is compliances tests and information that gives them the satisfaction that the plan is run according to the terms of the plan document, the Internal Revenue Code, and\/or ERISA. That\u2019s it.<\/p>\n
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