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The ninth annual Plan Sponsor Attitudes Study reveals plan sponsors’ top concerns, as well as information on plan changes and participation rates. Fidelity surveyed 1124 sponsors whose plans had at least 25 participants and $10 million in assets, and start-upsto plans with more than a quarter million in assets. Plan sponsors surveyed used an assortment of record-keepers. The study focused on sponsors that use a plan consultant or financial advisor. It found that a historically high proportion of sponsors, 92%, say they work with an advisor. And while 44% of plan sponsors indicate that they’ve retained their current advisor for four years or less, 22% were looking to make a switch. This was down from 38% reported in 2017. In line with previous years’ results, the report indicates a high level of plan sponsor activity, with more than eight in ten sponsors reporting changes to their plans within the last...
As the unemployment rate has dropped, hiring has grown increasingly competitive, especially for businesses with highly-specialized positions. If you act as a 3(21) fiduciary, it’s important to understand how 401(k) matches factor into the hiring process and how they financially benefit the whole company. Here are a few reasons why offering a 401(k) match helps your business. Competitive Hiring If you don’t offer a 401(k) match, chances are your competitors do, meaning it’s more difficult to attract top talent. A full benefits package that includes a 401(k) match may prevent you from paying top dollar to win candidates who might consider a job offer from your competitors. Reduced Turnover In order to reap the largest rewards attached to a 401(k) match, employees often must work for a particular period of time, known as vesting. This timeframe encourages employees to stay and maximize their contributions to receive the best benefits. Since replacing...
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...