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Take Advantage of These 6 ‘Low-Hanging’ Opportunities

Advisors and plan sponsors should be taking advantage of the “low-hanging” opportunities that still exist, says industry insider Steff Chalk.

In his most recent column in NAPA Net the Magazine, Steff lists six areas of opportunity:

An engaged retirement plan committee. “One or two knowledgeable retirement committee members cannot possibly achieve the results that a fully engaged committee can,” Chalk notes. “Increasing the level of engagement of a retirement plan committee directly benefits the participants and makes the advisor’s job more rewarding and easier.”

Fiduciary risk management. Few plan fiduciaries comprehend the distinctions among fiduciary insurance, a fidelity bond, and directors’ and officers’ errors and omission coverage. Additionally, Chalk notes, there are disconnects around the concepts, requirements, coverage and the risks. “Retirement plan advisors with a command of fiduciary risk management are in high demand and short supply,” he notes.

Total Benefit Statements. “Many employers feel that producing a Total Benefit Statement and distributing that statement annually is an asset too powerful to ignore,” says Chalk. Moreover, communications around these statements is as important as the benefits themselves, he believes. Communication of an employer 401(k) match within the statement should include verbiage, graphics representation and clearly convey the concept of “leaving company money on the table.”

Financial wellness. More and more plan participants are asking HR professionals and finance officers for access to an investment advisor or a financial representative, and for help with financial wellness, Chalk notes. “Overall, plan participants want (and need) better education on the topic of managing their own finances,” he writes, adding that this better education comes in the form of technology and targeted education by age and income analysis.

Boost the employer match. Many organizations continue to send the wrong message to their workforce based on their 401(k) plan match, says Chalk. “Any plan with a match of less than 6% of compensation should be referred to as a ‘savings program,’ not a retirement plan,” Chalk declares. “A 3% match is generous, but it isn’t sufficient to prepare and sustain a workforce that is living longer than any prior generation. As an industry we should promote a higher savings rate and corresponding match.”

Ditch the waiting period. With so much research pointing to the benefits of auto-enrollment, “It is astounding that some plan sponsors still require a 12-month waiting period” before permitting employee deferrals into the plan, Chalk asserts.

In addition to Chalk’s regular “Inside the Plan Sponsor’s Mind” column, the Fall issue of NAPA Net the Magazine includes our cover story on the impact of the DOL conflict-of-advice rule on DCIOs and record keepers and NAPA’s 2016 Top 100 Wholesalers list. The issue also features insights from regular contributors Jerry Bramlett, David Levine, Nevin Adams, Warren Cormier, Brian Graff, Don Trone, Sam Brandwein, Fred Barstein and Lisa Schneider.

To view Chalk’s column, click here and select “Successful Plan Strategies Are Not a Zero-Sum Game.” And to view a pdf of the full 64-page issue, click here.