The warranty in the electronics business is gravy for the retailers who sell it. You\u2019ll be surprised how many people pay $20 to get a warranty on a $100 Blu-Ray player. When Best Buy was going national, they advertised how they wouldn\u2019t sell warranties and then realized that they couldn\u2019t turn down all that free money, so they started offering it.<\/p>\n
A warranty is like insurance, so you should only insure those things that have a high-cost replacement. You insure your health, your life, your house, your car, and some appliances worth insuring.<\/p>\n
This isn\u2019t another diatribe about the fiduciary warranty that insurance companies give away for free even though their main business is insuring risk for a fee.<\/p>\n
This is about plan sponsors who don\u2019t insure their risk by buying fiduciary liability insurance or buying a plan service that could review their plan expenses and\/or their plan document\/administration.<\/p>\n
Fiduciary liability insurance helps protect plan sponsors who find themselves also appearing as defendants in a lawsuit filed by an aggrieved plan participant in a town near you. I had clients sued in a class action lawsuit where the insurance company paid $900,000 for a $1 million legal fee (there was a $100,000 deductible) and this plan sponsor won their case.<\/p>\n
So many plan sponsors don\u2019t want to pay for a plan review that can help them identify plan issues they wouldn\u2019t ordinarily find unless they were converting to a new provider. I have a plan review called the Retirement Plan Tune-Up for $750 and I can probably count on one hand how many I do a year. When I talk to plan sponsors and advisors, they seem interested but they treat a plan review like a trip to the dentist; something that they will avoid until it\u2019s too late.<\/p>\n
Spending some shekels on a fiduciary liability policy and a plan review is certainly well worth it to avoid greater harm later.<\/p>\n
<\/span><\/p>","protected":false},"excerpt":{"rendered":" The warranty in the electronics business is gravy for the retailers who sell it. You\u2019ll be surprised how many people pay $20 to get a warranty on a $100 Blu-Ray player. When Best Buy was going national, they advertised how … Continue reading