I’ve always believed the retirement plan business needs its own version of a greatest hits album for bad decisions. Not because I enjoy watching train wrecks, although professionally speaking, they can be educational. But because some of the most valuable lessons in this industry come from seeing exactly how things go wrong.
Welcome to What Were They Thinking? Retirement Plan Edition.
This is the business where a plan sponsor decides daily eligibility sounds simple because “how hard can it be?” Six months later, payroll missed deferrals for half a dozen employees, HR insists they sent the notices, the recordkeeper says they never received enrollment data, and suddenly everyone is learning far more about corrective QNECs than they ever wanted.
Or the sponsor who wants every available feature because they heard them mentioned at a conference. Safe harbor match? Sure. Automatic enrollment? Why not. Roth? Of course. After-tax contributions for mega backdoor Roth conversions? Sounds exciting. Participant brokerage accounts? Let’s be progressive. Then someone realizes the payroll department still struggles to process regular deferrals correctly.
Then there’s the classic vendor transition disaster. Sales promises seamless implementation. Operations inherits the mess. Census data is incomplete, payroll mappings are wrong, blackout notices go out late, participant loans get mangled, and everyone wonders why conversions have the reputation of airline emergency landings.
And of course, my personal favorite: “We’ll fix it later.”
Those four words deserve their own retirement industry hall of shame.
Because later usually means after the IRS finds it, after participants complain, after the audit starts, or after the correction cost has multiplied.
This series practically writes itself because the retirement plan business is full of well-intentioned bad ideas, preventable mistakes, and overconfident decision-making.
Not every disaster comes from incompetence. Sometimes it comes from complexity. Sometimes from bad communication. Sometimes from trusting the wrong vendor. Sometimes from assuming technology solves operational weakness.
The point isn’t mockery.
Well, maybe a little.
The point is that every retirement plan failure has a lesson. And if we’re smart, we can laugh at the mistakes we avoid instead of the ones we repeat.
