About 10 years ago, the SEC together with the US Department of Labor developed a set of questions that plan fiduciaries should ask their advisors to provide amongst other things, clarity on potential conflicts of interest.
Considering the source, I would suggest it prudent to include them in a proposal request, should a plan sponsor be considering a provider change or at least a review of existing services. To that end, I think it makes a lot of sense to ask your plan advisers these questions every year, just in case circumstances have changed.
We get hired by retirement plan sponsors for a variety of projects: fund evaluation, requests for proposals, plan design, Investment Policy Statement reviews and committee governance. By far and away the most interesting activity for us is the development of the Participant Education Policy statement.
Just as an Investment Policy Statement outlines the investment expectations for the plan, an Education Policy Statement should define the educational intentions of the plan. In our opinion, it is a useful piece of the fiduciary function and a vital part of a successful retirement plan.
At the time of writing, the 114th United States Congress is settling in for a new session of playful banter and thoughtful cooperation and 401(k)s will be on the agenda again.
Both lawmakers and academics are proposing changes to the retirement system that are intended to make 401(k)s more user-friendly and transparent. Other proposals focus on making plans more like regular “pensions,” restricting early withdrawal, and lowering costs.
Part of the issue facing employees and employers alike is that 401(k)s were not intended for the burden they now support. They were described in a brief 859-word insert in the much broader 1978 tax law supplementing defined benefit plans. Those DB plans are rapidly disappearing, leaving 401(k)s as the main vehicle for accumulating retirement benefits. Today’s workers are required to become skilled investors who understand issues such as lifespan and market volatility unknowns.