Back then, at least, we knew who wore the white hats and who whore the black hats. Today, thanks to muddled and often conflicting regulations for multiple agencies, everyone is wearing fifty shades of gray.
Education
The key intent of this strategy is to allow freedom to and reward long-term employees who have accumulated the skills the company needs to compete.
Still, it seems most financial professionals feel anything that brings people closer to the road towards financial independence should be encouraged.
Overall, nearly 1 in 5 companies still have not adopted auto-enrollment. There are common reasons why companies would not include auto-enrollment in their plans.
The root of these broader fiduciary concerns lies within the domain of compliance. Everything derives from what the regulators require, what any DOL audit might look at, and what might pique the interest of class-action attorneys.
Oddly the first question, the one asked from the plan sponsorâs perspective, came back with a slightly different answer (identifying appropriate investment options and then providing employee education regarding those options). This second question, from the professional fiduciaryâs outlook, adds a bit of emphasis on fees. Are the different responses significant? Is the similarity in responses a problem?
Thatâs what a new education can focus on. Instead of the same-old-same-old of emphasizing âsaving early and often,â education should think past the sale.
Hereâs the irony of the tax saving incentive. If itâs wildly successful and leads to very large retirement accounts, the required minimum distributions at retirement may place the now retired employee in a higher tax bracket than the one experienced while working.
Retirement plan sponsors may also benefit from teaching entrepreneurial skills to their employees. Such lessons could also provide employees with opportunities to begin to practice what they learned directly for their current employer.
From an employer perspective, itâs not just about the 401k plan. There are greater realities that must be dealt with. Different firms, however, will find distinctâand differingârealities.
