Nevin's Data "Points"

A recent ad campaign focuses on the distinction between identifying a problem and actually doing something about it. In one version  a so-called “dental monitor” tells a concerned patient that he has “one of the worst cavities that I’ve ever seen” before heading out to lunch, leaving that cavity unattended. Another features a “security monitor” who looks like a bank guard, but only notifies people when there is a robbery. As an industry, we have long worried about the plight of the average retirement plan participant, who doesn’t know much (if anything) about investing, who doesn’t have time to deal with issues about their retirement investments, and who, perhaps as a result, would really just prefer that someone else take care of it. What gets less attention — but is just as real a phenomenon — is how many plan sponsors don’t know anything about investments, don’t have time to deal with issues about their retirement plan investments, and who, perhaps as a result, would — y...

There is frequently a difference between doing all that the law requires of a plan sponsor and doing everything that could be done. Here are five things that plan sponsors don’t always do — but should. 1. Have a Plan/Plan Investment Committee. ERISA only requires that the named fiduciary (and there must be one of those) make decisions regarding the plan that are in the best interests of plan participants and beneficiaries, and that are the types of decisions that a prudent expert would make about such matters. ERISA does not require that you make those decisions by yourself — and, in fact, requires that, if you lack the requisite expertise, you enlist the support of those who do have it. However, having a committee for having a committee’s sake can not only hinder your decisions — it can result in bad decisions. Make sure your committee members add value to the process. (Hint: Once they discover that ERISA has a personal liability clause, casual participants generally drop out ...