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5 Ways You Can Benefit from Partnering with a Retirement Plan Advisor

From decoding key ERISA regulations to keeping abreast of fees and providing educational support to workers, there are many responsibilities that plan sponsors possess. Some business owners even forgo offering a 401(k) to their employees because they fear they don’t have the time or expertise to manage a plan.

However, whether it’s helping to attract and retain top talent or providing valuable tax advantages, a robust retirement offering is a major asset to an organization. To take advantage of these benefits, but still have time to run day-to-day operations, sponsors can avail themselves of an invaluable resource — a retirement plan advisor.

Here are a few reasons to consider bringing in a specialist:

There isn’t (or shouldn’t be) a one-size-fits-all approach to plan design. Factors such as business size, participant needs, and employee pay levels can all affect what kind of plan might be optimal for you. An advisor can design a plan that meets your business goals and customize your fund lineup, set vesting schedules and procedures, incorporate or omit revenue sharing features, determine qualified default investment alternatives and more.

Plans can also be tailored to meet the needs of your employees. For example, new hires who have recently graduated with high student loan debt may have different objectives and concerns than highly tenured individuals. Growing businesses can also benefit from an advisor because they can find options that will keep fees reasonable and help prevent your plan from running afoul of ERISA regulations.

One of the key steps to promote positive plan outcomes is by encouraging a high participation rate. This helps your plan avoid becoming top-heavy and assists with passing required nondiscrimination testing. Skilled and experienced advisors leverage plan design features and multiple outreach methods to encourage employee participation. Seminars, one-on-one consultations, and educational content can help them feel motivated to contribute and empowered to save for retirement.

An advisor can help mitigate fiduciary risk by assuming some of the responsibility. A 3(21) fiduciary will share fiduciary responsibility and make recommendations for selecting and replacing investment options, while a 3(38) fiduciary is delegated the actual responsibility to manage plan assets. However, the sponsor is ultimately responsible for ensuring that the fiduciary is properly appointed and monitored. Which type of fiduciary you choose to work with will depend on your needs, but either way, hiring an advisor can help you keep your fees transparent and reasonable — and ensure investments perform well enough to merit continued inclusion in the fund lineup. Excessive fee litigation is becoming more commonplace, and it can be costly. You want to do all you can to avoid finding yourself in the crosshairs of a 401(k) lawsuit, and in the unhappy circumstance that you do find yourself there, you want the confidence that you understood prudent processes and have the proper documentation of same.

Sponsors who run their own plans have their work cut out for them to maintain compliance. By working in conjunction with your other service providers and retirement plan committee, advisors can help ease administrative burdens. Market changes, mergers and acquisitions, and regulatory changes could affect plan design and investment lineup decisions. A retirement plan advisor can help you stay abreast of any developments that may affect your organization.

The upkeep of a retirement plan can feel overwhelming at times. Though some sponsors attempt to run their plans on their own, those who hire advisors have a built-in support system that can help ensure their retirement plan is a net benefit, instead of a burden.

Download PDF version of 5 Ways You Can Benefit From Partnering with a Retirement Plan Advisor:

5 Ways You Can Benefit From Partnering with a Retirement Plan Advisor
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This information is not intended as authoritative guidance or tax or legal advice.

Securities are offered through LPL Financial. Member FINRA/SIPC. Investment advisory services offered through CSi Advisory Services, a registered investment advisor. CSi Advisory Services and LPL Financial are separate non-affiliated entities.

ACR# 4777692 06/22

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