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What’s Your View of a Company Retirement Plan?

November 13, 2019

What’s Your View of a Company Retirement Plan?

Having had the opportunity to work with hundreds of employers throughout my career, I’ve know first-hand many employers are under the impression (or have enough experience to know), that retirement plans are a legal entity that must be handled by professionals.  Some have chosen to leave their retirement plans on “auto-pilot,” only to learn later it was not handled correctly.

What is the best choice and how should a business owner view and select a company-sponsored retirement plan?

The “It’s Too Difficult” Myth

Setting a retirement plan is actually quite simple. All a business owner really needs to do is deduct money from an employee’s paycheck, send it to the investment company,and the investment firm handles the rest.

The Real Reality 

It’s true, retirement plans can be very complex.  Government compliance and fiduciary liability and responsibilities aretime-consuming and they require the help of experts.  

What Is Your Philosophy? 

A. Do you view your retirement plan as an important benefit that must be handled just like you handle other high-level business, legal, and accounting plans/issues?

 OR

B.  Do you view your retirement plan as just another benefit that you should shop for the lowest price and have the least amount of involvement?

Two Strategies 

A. Hire independent 401(k) TPA with a recordkeeper alliance and engage a financial adviser to help manage the investments.

B. Bundle the services with a 401(k) provider who does everything

Roles & Responsibilities

Who is in charge?

Option A - Provides an outsourced service for administrative and government compliance and is less “hands-on” for the employer

Option B – Transfers all liability to employers and the process is highly automated

Conclusion

You will find after investigating both Option A and B, the cost of each option is about the same. Our professionals at BEI will often recommend you consult with a financial advisor retirement plan specialist to review your keybusiness objectives and goals. To learn more about how a well-thought out and strategized retirement plan can bring value to your company and your employees, contact a Benifit Equity, Inc. advisor today.

Author: Robert Gorelick, APA, Founder Benefit Equity Inc.