1) Does your plan have a QDIA?
2) Does your plan have at least one option in domestic large cap, mid cap and small cap equity, foreign equity, core fixed income, high yield, short-term, intermediate term and long-term government fixed income, foreign fixed income, emerging markets (equity and debt) commodities, real estate and at least one QDIA option?
3) Do you know the average expense ratio for the fund options in your plan lineup?4) Do your participants have 24/7 access to their accounts?
5) Are you using a financial advisor to provide plan consulting and employee educational services?
6) Is it time for a plan check-up?A retirement plan consultant can help address all of these questions. Plan sponsors have a fiduciary duty to manage the plan in the best interests of plan participants. Consultants can help plan sponsors meet their duties by:
1) Writing the Investment Policy Statement – one of the first documents requested by the DOL when auditing a plan.2) Selecting or guiding the selection of investment options – helping to ensure that the plan has at least one QDIA and offers diversification among investment options – asset classes, styles, firms, etc.
3) Providing on-going evaluation and performance analysis of the investment options and recommending changes when needed.
4) Providing guidance on plan design, selection and implementation including retaining the plan administrator.
5) Providing on-going educational services to plan participants.It isn’t necessary or required to use a consultant, but it can be highly beneficial. After all, the primary business of most plan sponsors is not retirement plan management. Thus, using a consultant, while not absolving the plan sponsor of fiduciary responsibility, can enable the plan sponsor to do what it does best – grow the business.
