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What all good 401(k) plans have

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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:

 

  1. The leadership of the 401(k) plan understands their duty as plan sponsor and plan fiduciary.
  2. A third party administrator (TPA) who does a competent job in plan administration.
  3. A financial advisor who understands the retirement plan business and understands that their real role is minimizing the plan sponsor’s liability.
  4. A plan design that fits their needs, goals, and pocketbook.
  5. An investment lineup that isn’t too large that it increases participant confusion which depresses the rate of salary deferrals.
  6. Communication and technology that will get plan participants more engaged which would lead to higher participation.
  7. A review of costs and plan providers to make sure what works still actually does work.
  8. An ERISA attorney on call when they need them.
  9. An auditor (when the plan needs an audit) that gets the job done competently and ahead of any Form 550

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