I worked for years on the manufacturer’s side of the fence in the auto industry. I never understood why so many manufacturers wanted to tout we’re number one. Do sales figures equate to safest or highest quality car? Then I worked for this company called Mercedes-Benz that doesn’t sell so many cars. You get the picture.
Does your plan professional talk about how many participants of theirs are on track to retire? Your plan interest may be a selfish one or you may be focused on benefiting your highly compensated people. However, the government says you have to care about everyone.
Can you assess retirement readiness?
What if your participants find out that you didn’t watch over their plan, are you putting yourself in the cross-hairs of the Department of Labor or a class action lawsuit? Start viewing your 401(k) as an Employee Retirement Income Security Act Plan. Your advisor should have access to a toolkit of retirement assessments. If your retirement plan advisor cannot provide reports that provide actionable data to get your employees on track get one that can. The Department of Labor is charged with increasing security. Can you prove you are working for the benefit of your participants and their beneficiary’s.
Further, you may want to use the plan health metrics from the book Save More Tomorrow. That book says 90% of your employees should be participating, saving $10% with 90% using professional advice for their investments.
Increasing retirement savings should lead to decreasing investment costs
Increasing savings could be the prescription if your plan has high fees. As deferrals increase, many costs would decrease in proportion. The best defense could be a great offense. The next time someone brings up top selling as the reason for recommending you also buy one, you’ll pause for signing on the dotted line.