5 Keys to Evaluating Group Retirement Plans

Posted by Freedom Advisors on Apr 2, 2024 8:30:59 AM

As a financial advisor, it's likely that your client base includes business owners who also serve as retirement plan sponsors. Managing so many different types of plans including 401(k)s, profit-sharing, SEP, defined benefit, cash bonus plans, and more, can be a daunting responsibility, especially with the ever-changing regulatory landscape and plan design requirements. However, this challenge presents an opportunity for you to lend your expertise and engage industry retirement plan experts to support plan sponsors in conducting a thorough plan evaluation.

Is it time to evaluate their retirement plan(s) to ensure compliance with current regulations and competitiveness of features versus what is available in the marketplace? Are they paying a reasonable price, factoring in plan size and complexity, and advancements in plan design and administration technology? Here are key factors to consider:

  1. Investment Lineup: Regularly reviewing the investment lineup and documenting that review is crucial to ensure it aligns with the goals and risk tolerance of plan participants, while also providing access to industry-leading products in the market. Assessing performance, fees, and diversification can help optimize the lineup and potentially enhance returns over the long term, not to mention comply with ERISA standards and fiduciary best-practices.
  2. Automation: Embracing automation is key to streamlining processes and reducing administrative burdens. From payroll integration to contribution processing, leveraging integrated systems can improve efficiency while minimizing errors.
  3. Cost Efficiency: One of the fundamental aspects to review is whether your clients are paying competitive prices for essential services such as record keeping, compliance oversight, custody, and investment advisory. With advancements in plan administration technology and increased competition, it's essential to ensure they're getting value for their money. Transparency in fee structures is also vital, so clients can readily understand costs.
  4. Regulatory Compliance: Staying abreast of Department of Labor (DOL) rule changes is paramount to avoid compliance pitfalls. Regularly reviewing and updating plans to reflect regulatory updates helps mitigate risks and ensures adherence to legal requirements.
  5. Employee Engagement: Engaged employees are more likely to participate in retirement plans and make meaningful contributions toward their financial futures. Communicating regularly with all eligible employees and providing educational resources and tools to plan participants can empower them to make informed decisions and take control of their retirement savings journey.

At Freedom Advisors, we're committed to helping you ensure that your clients' retirement plans are optimized for success. Our team of experts can conduct comprehensive plan checkups, identify areas for improvement, and implement strategies to enhance plan effectiveness and participant engagement. By partnering with us, you can help your business owner clients recruit and retain valuable employees while ensuring they receive top-notch retirement benefits at a reasonable price.

Don't wait until issues arise—schedule a plan checkup today and empower your clients to secure their financial futures with confidence. We can support plan types including 401(k), 401(a), 403(b), defined benefit and profit-sharing, and offer a wide range of retirement plan services directly and through alliances with strategic partners. View our Group Retirement Plan Services to learn more.

Topics: Advisor Support

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