Itâs critical that plan sponsors consult with compliance professionals before adding the Deemed IRA feature.
Education
The story arc of the 401k mimics that of software. Each release adds to and builds on features and benefits over and above those of previous releases.
It might suit 401k plan sponsors and fiduciaries to tell this story of the generations to help the next generation avoid the mistakes of past generations. This tale provides many good tips about the dangers of investing in extremes, be they too conservative or too aggressive.
There is an out, of course, but that might eliminate the so-called âinstitutional pricingâ advantage former employees have for staying in the plan in the first place.
While retirees and near-retirees may be considering starting a small side business, many donât have any entrepreneurial experience. How might they find answers to the questions they have?
If youâre over fifty, that gold watch gleams closer and closer. You start thinking. You start wondering. You start asking questions.
To address this requires employers to do more than having a periodic âemployee educationâ meeting. While these can help (see the previous article), more need to be done. Plan sponsors need to consider how they (and, more importantly, their service providers) deliver messages to plan participants.
Not only does the typical plan sponsor not have investing in employee education as a high priority, but they also likely donât have the wherewithal to monitor the consistency of how the provider runs the education program.
How do you solve, for example, the problem of integration between the payroll software and the 401k recordkeeperâs website?
A few years ago, this might have been classified as a common âmistake.â Again, âmistakeâ is in quotes because this is less an issue for certain plans (usually small firms or particular industries) than others.