First, conduct an assessment. See if automatic enrollment and automatic escalation make sense for your plan. If you decide to implement automatic enrollment, consider a default rate of deferral that’s greater than 3% to set your employees up to be prepared for retirement.
Second, identify generational differences among your staff and target your communications such that you address the different beliefs, needs and constraints of each group. You’ve got to look for ways to creatively deliver educational content so that you reach all of your employees.
Third, form a retirement committee and meet at least annually or semi-annually and keep detailed meeting minutes. Consider outsourcing investment monitoring to a qualified professional, such as a 3(21) or 3(38) investment manager.
Fourth, complete a fee analysis. Compare your actual costs to National benchmark data. The 401(k) averages book is an awesome tool. It’s inexpensive and enables you to review your plan costs against National benchmark to see if things are reasonable.
Fifth, review your plan’s investment options. If there’s a cheaper share class or alternative, it may make sense to cut out revenue-sharing completely.
Lastly, hire experienced professionals to record-keep, administer, and audit your plan. By doing so, you’ll increase the likelihood that your plan will withstand regulatory scrutiny.
Brian Schiedel is responsible for monitoring daily valuation recordkeeping services, ensuring that transactions meet strict procedural guidelines, and providing compliance and other consulting services for Burke Group’s retirement plan clients. He serves as the direct Relationship Manager for more than 30 retirement plans.
Prior to joining Burke Group, he obtained his bachelor’s degree in management science from the State University of New York at Geneseo. He has also obtained the Qualified 401(k) Administrator (QKA) designation through the American Society of Pension Professionals and Actuaries (ASPPA).