How Can a Plan Sponsor Share Responsibility?

lan sponsors have it rough. They usually work in the finance or human resources department or, in the case of small business owners, they wear all the hats! They’re busy and usually have enough going on to occupy their work day. Adding the fiduciary responsibility of being designated their companies retirement plan sponsor will only add to the stress they already feel. Knowledge of retirement plans is both broad and focused at the same time; you have to know the details about what seems like a never-ending list of laws and new regulations, what investments are doing, and the costs associated with the plan. Here at Plancheckr our advisors take some of the weight off our Plan Sponsors in four of the following ways.

    As investment professionals they investment lineups that are both cost effective and that fit the requirements of each plan individually. They fit the lowest cost class of shares into the line-up to both mitigate cost and encourage performance. With areas to document both fund changes and fee disclosures, Plancheckr makes this information easy to access for plan sponsors all the while ensuring that the process is documented to protect the advisor and plan sponsor.
    In the same way that you should shop around for personal automobile insurance, each year your advisor should be checking to see if the fees your plan is paying to service providers are within the market range. This doesn’t have to be done annually, but a cost check-up on plans should be done once every three years at a minimum. The Department of Labor throws around the term “reasonable” often. This is an instance where “reasonable” can be easily measured. For example, you would have some problems if your retirement plan had $300,000 in assets and 7 participants, but was paying fees similar to what a $575,000 plan with 15 participants was paying. Hiring an advisor who uses Plancheckr could be the make-or-break. Plancheckr encourages advisors to do some kind of benchmarking every year merely for the sake of proving that it was done. Documentation is imperative in this industry.
    Have you considered that you are using the wrong professional to help with your retirement plan? If you have one, does your advisor only solicit investment advice? Or are they a full-blown fiduciary adviser who can educate your participants and who is required by law to do what is in your best interest? Advisers can often bundle their services to help you grow and manage your retirement accounts while taking on a large portion of the liability that comes with being a plan sponsor. Plancheckr is open to use by every kind of advisor/er involved in the retirement industry and provides a strong fiduciary backbone to guide all practices.
    The Investment Policy Statement – the document to guide all documents. The IPS is drafted between those in charge of a plan for the benefit of the plan. If you’re working with an advisor they will draft it for you! This document states how the plan will operate, how goals are defined, in what ways success will be measured, and how to approach problems within the plan. As we’ve said before, documentation is paramount. Referring to and updating critical documents such as the IPS allows you to rest easy knowing your plan is following a documented plan to guide it to success.

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