7 New Year’s Resolutions for Plan Sponsors
This is the time of year when resolutions for the cessation of bad behaviors and the beginning of better ones are in vogue. Here are mine for plan sponsors. Put your fund menu on a diet. Though it is a point often made with jellies and ice cream, a long-standing behavioral finance tenet is that more choice doesn’t lead to better decisions. So what’s with those burgeoning 401(k) investment menus? Plan sponsors tend to offer more than 11 investment options in their DC plans, with 38% offering 11 to 15 options and 45% offering more than 16 options, according to the Rocaton/Pensions & Investments 2015 Survey of Defined Contribution Viewpoints study, which polled more than 400 plan sponsors and other industry professionals. Odds are that you have funds on your menu that either aren’t being used or being used widely — options that contribute little other than clutter to your investment review and to the decisions of your participants. Take a look — your retirement plan menu should