You researched different retirement plans. You made an educated decision in selecting the right one for your organization. You even hired a retirement plan advisor. Now, you have officially completed all of your responsibilities. Or have you? Even with a plan advisor in place, your company is still considered the 401(k) sponsor and a fiduciary, which comes with specific responsibilities. Knowing what is expected of you as a fiduciary helps ensure your employees get the most out of their retirement plan benefits.
Understand your retirement plan
The plan advisor knows the details of the actual investments, but it’s your responsibility to understand what your plan entails. You should know:
- The requirements for getting employees enrolled
- Which employees qualify for the plan
- How your contributions are divided amongst employees
- How and when benefits are paid out
- What the vesting period is
Some of these plan factors are also your responsibility to establish, including employee eligibility requirements and the vesting period (more on these factors later).
Diligently monitor retirement plan service providers
As the plan sponsor, you appoint a plan advisor and select numerous service providers. However, selecting those providers is not the end of your responsibility. You also have to continuously monitor them. You want to ensure that your providers offer the best services and investments for your employees. Regularly review the fees associated with your providers to ensure the rate remains competitive with other providers and advisors in the marketplace. Your advisor should help conduct an annual plan review meeting to evaluate aspects of the plan, along with assessing plan providers and expenses to show due diligence over the Plan.
Manage retirement plan members
While the plan advisor will help your employees enroll in their 401(k) plan, it is your responsibility to communicate to the advisor which employees are eligible. When a new employee joins your organization, you need to provide the administrator with the proper information to get them set up on the plan. If an employee leaves your company, you also need to communicate that change to the administrator to ensure the recordkeeping system is updated. You also have the responsibility of deciding which employees can participate in the 401(k) plan (i.e., full-time employees or employees with a certain job tenure).
Decide retirement plan structure
You will work with your advisor to determine what retirement plan and features are the best fit for your organization. You decide the plan structure, eligibility requirements, employer matching, the percentage of matching and the vesting period for full benefits. The plan advisor will assist you in managing tasks involved with your plan.
The plan sponsor and the plan advisor must work together to help employees achieve their retirement goals. Our advisors have decades of experience helping employers manage their fiduciary responsibilities for qualified retirement plans. If you have questions about your role as a plan sponsor and fiduciary, we can help. Contact your RKL advisor or use the form below to get started.