As a Financial Adviser of more than 24 years, I've specialized in the retirement side of investments most of that time through up and down markets and 4 different Presidents. Specializing in company or plan sponsor retirement plans has given me great access into the C Suite and the HR side of companies that most don't get to see. I've been in board rooms talking over 401(K) strategies that involve everything from plan design to company funding to employee participation/education. What really stands out to me is the great lack or void of competent retirement plan advisers who advise companies to not only offer the retirement plan but to fund the plan correctly and most importantly educate the employees so that they can make the best decisions possible for themselves with regards to their retirement plan.
With Defined Benefit plans basically becoming extinct giving way to the Defined Contribution plans that we affectionately know today as the 401(K) world, it's becoming more and more important for companies to offer these plans and to run them efficiently to provide a well developed plan available to their employees. If you poll an average 150 person company and you had a 50% participation and you asked them to explain their 401(K) plan in any kind of detail and to list out the reasons for being in the plan they would be stuck in neutral and wouldn't be able to tell you anything except they know that it's something they should be doing. What we really need to be doing is more plan sponsor education along with 1 X 1 participant meetings to give the education so that employees feel more confident in themselves as it relates to their retirement savings. Too often the 401(K) is an afterthought and is there merely to attract new employees. I hope that this trend changes and more competent advisers stress the education for the Plan Sponsor and the participants to help the plan run more efficiently. ERISA is a very complicated area thus plans can't just be sold, they really need to be understood and the processes need to be put in place that keep the plan running as smoothly as possible!
Scott Kuharski