Retirement Plan Sponsors that work with a professional retirement plan advisor show higher levels of participant retirement readiness, according to a 2014 study from the Retirement Advisor Council.1 The study included 407 employers that sponsor a 401(k) or 403(b) plan, and concluded that:
Improve Retirement Participant Preparation
Three-quarters of the sponsors surveyed who work with a professional advisor estimate that half or more of their plan participants are on track to a successful retirement. Professional advisors regularly review the readiness of plan participants and provide that information to plan sponsors. Sponsors are then able to act in an effort to improve retirement outcomes for their employees. These actions include increasing communication, educating participants better, adjusting the participant contribution formula, and adopting automatic contribution increases. More than 40 percent of the surveyed companies have their advisors meet individually with participants to provide investment information.
Increase Contribution Levels
Eighty-three percent of the retirement plan sponsors who partnered with professional advisors have seen their deferral rates increase over the previous two years, and a third of those sponsors have a deferral rate increase of 6 percent or more. Professional advisors can recommend changes to retirement plans that may bring more employees into the plan and boost their contributions.
Plan Sponsors Benefits
An overwhelming majority (95 percent) of sponsors that hire a professional retirement plan advisor say that the partnership is “very beneficial” or “a necessity.” Sponsors working with retirement plan advisors receive better service for the major retirement plan administration, such as implementing fiduciary processes, reviewing investment options regularly, recommending plan design features, and providing due diligence for service providers.
Finally, the study notes that professional retirement plan advisors bring confidence to retirement plan sponsors by by providing administrative support and compliance assistance.
FiduciaryFirst can help your retirement plan be more dynamic by streamlining your administration processes and working with your participants. For more information, visit www.fiduciaryfirst.com or call us at 866-625-4611.
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Retirement Plan Consulting Program and other advisory services offered through LPL Financial, a registered investment advisor.