Many of us in the retirement plan space didn’t plan to be here – and that’s often the case for plan sponsors as well. So, how do they get trained – or do they?
On a personal level, most of this week’s respondents (55%) pursued a number of tracks in their own education, though most of those (63%) were trained on the job and about one in five pursued professional accreditation, with the rest picking things up from conferences/webinars, while some received employer-sponsored training.
Training ‘Weal’
While it may be hard to generalize, we asked, for the most part, how well trained/informed reader plan sponsor clients were to do their job. Roughly a third (31%) said they were “figuring it out,” with nearly as many (27%) said to be “…in good shape – mostly because I trained them.” Roughly a quarter (24%) said their clients were “in pretty good shape.” However, about 14% said that when it came to being trained/informed, their plan sponsor clients were “not very.” That left 3% who said they “weren’t even sure they could spell fiduciary.”
“We send newsletters and try to make it as ‘easy’ as possible for them,” explained one reader, “but the best ones are the ones who’ve done it before, the ones who really tackle any task to the best of their ability, and the ones whose predecessors left good, detailed notes.”
“Turnover in client HR representatives is becoming a drag on productivity,” said another. “We are training client HR reps, only to see them leave for other opportunities.”
Training Sources
Not surprisingly, nearly three-quarters (72%) of reader poll respondents said they had trained their plan sponsor clients. The rest weren’t always sure of how the training had occurred, but most cited some combination of learning from their predecessor (for better or worse), our trainings, on the job/trial by fire and providers/TPAs guiding them, as well as industry experience and participation in HR groups.
As for the area(s) in which they felt their plan sponsor clients most needed training (more than one response was allowed), readers cited:
65% - fiduciary responsibility
64% - plan administration
35% - behavioral finance
31% - investments
30% - plan design
28% - nondiscrimination testing
24% - fee benchmarking
“They do not need to be plan administrators, know details of discrimination testing or plan design, but they do need to have an understanding of those responsibilities,” commented one reader. “The problem is that they do not have an understanding of these responsibilities, which often leads to compliance issues.”
“They need training on all these, I checked the three biggest areas where we see lack of knowledge,” said another reader.
Other Comments
“Our team conducts fiduciary governance training for committees including reviews of recent court cases. Even with this training committee members wear so many hats that we have to continually keep the retirement plan and their responsibility front and center.”
“Most small plan sponsors have little to no interest in learning the rules or spending the time to fulfill their fiduciary obligations. Other than signing a form, distributing a notice, or making contributions and distributions, they expect their advisors to do everything else. A large part of the problem is the use of the word ‘administrator’ for both the ERISA Plan Administrator function and the TPA/pension administration firm function. The line between the two is often blurry and it takes a continual effort to educate our clients on the difference.”
“Small business owners have neither the time nor wish to put in the effort to understand plan sponsor responsibilities and what it means to be a fiduciary. They would be unlikely candidates for certification credentials.”
“Clients that have been around for a while are in good shape. Newbies need help. I’m not sure there’s any hope for an owner’s spouse who is now in charge of all things plan related.”
Thanks to all who participated in our weekly NAPA-Net Reader Poll!
Speaking of education – 76% of this week’s reader poll respondents had heard of the new Certified Plan Sponsor Professional (CPSP) credential. If you’ve missed the updates – you should check it out at https://www.napa-net.org/news-info/daily-news/education-precedents.
