Sound retirement plan management strategies will help ensure that you limit the risk your company may face as the plan’s sponsor.
With qualified financial advisors to oversee your plan’s administration, you can identify, manage and head off as many potential problems as possible.
Your Responsibility as Plan Sponsor
As an employer and the sponsor of your company’s retirement plan, you have an obligation to the plan’s participants to protect their assets.
Heeding these obligations will help you avoid legal perils that some firms have faced when participants challenged the sponsor’s governance and plan management strategies.
More important, taking steps to minimize risk will reinforce your commitment to your employees — past, present and future — and help ensure that your participants are as ready as possible for their retirement.
Evaluating Your Retirement Plan Management Risks
The most profound risks that accompany retirement benefits plan management include a low participation rate, a poor (or nonexistent) asset management strategy and a lack of effective governance.
As the plan sponsor, you must comply with all governing regulations. You must advise your participants clearly about the fees involved, but to also ensure that the fee structure approximates those of comparable funds.
You also have to consider the various market-related conditions that could affect your plan’s performance. Although you cannot foresee or control political, economic or other conditions that affect financial markets, you must ensure that your plan’s assets are allocated in a way that minimizes risk as much as possible.
Let a Certified Financial Planner™ Help You
One problem you may face is low participation in your firm’s retirement benefits plan.
If you’re in a situation in which your participant base consists primarily of your highly compensated employees, you could face challenges to your tax-qualified status. A plan management professional can help overcome these challenges by establishing effective communication with participants and — more important — employees who do not participate, to illustrate the importance of retirement readiness.
Likewise, an institutional wealth management advisor can help you develop, implement and monitor the management and governance of your company’s retirement plan.
The Certified Financial Planners™ of Divergent Wealth Advisors understand the importance of having an effective management strategy in place for your firm’s retirement benefits, overseen by a highly qualified institutional wealth and investment firm. Contact us today to learn more about our retirement plan management services.
DISCLAIMER: It is important to note that this information is not meant to provide investment, tax, legal or accounting advice. This material is for informational purposes only, and is not intended to provide, and should not be relied on for, investment, tax, legal or accounting advice. You should always consult your own financial planning, tax, legal and accounting advisors before engaging in any transaction.
Approved by Rick Collins, Divergent Wealth Advisors LLC, Chief Compliance Officer 6/19/2018