401k Plan Design Best Practices

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PSI Newsletter and Website Header 10.2.15

By Robert C. Lawton, AIF, CRPS, President, Lawton Retirement Plan Consultants, LLC

The 401k world is changing — fast. Has your plan kept pace? Is the design of your plan still market competitive? Leading-edge plans adhere to the following 401k plan design best practices: [Read more…]

401k Investment Menu Best Practices

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PSI Newsletter and Website Header 10.2.15

By Robert C. Lawton, AIF, CRPS, President, Lawton Retirement Plan Consultants, LLC

How does your 401k investment menu compare to the marketplace? Do you have too many investment options or too few? Are you taking advantage of all the safe harbor options available to you? In this low return, low interest rate environment there is a new set of best practices to use for 401k investment menu construction that includes: [Read more…]

Four Scary Retirement Statistics

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PSI Newsletter and Website Header 10.2.15 
By Robert C. Lawton, AIF, CRPS, President, Lawton Retirement Plan Consultants, LLC

Recently ThinkAdvisor shared some scary retirement statistics from a report by the National Association of Government Defined Contribution Administrators, Inc. (NAGDCA). These retirement statistics paint an alarming picture of most American’s state of retirement readiness. I have shared four of the more troubling retirement statistics below, and then outlined four quick, low-cost solutions you can implement to help your employees. [Read more…]

Should 401k Plan Sponsors Worry About The Roth Promise?

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PSI Newsletter and Website Header 10.2.15

By Robert C. Lawton, AIF, CRPS, President, Lawton Retirement Plan Consultants, LLC

Whenever I talk with 401k plan sponsors or participants about making Roth 401k contributions, at least half of them tell me they would never do it. They all cite the same reason. They don’t trust the federal government to keep its Roth 401k promise to allow tax-free distribution of Roth balances. I think they are wrong — not about trusting Uncle Sam, but about whether the government will keep its Roth 401k promise. [Read more…]

Five 401k Plan Improvements You Should Make This Year

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PSI Newsletter and Website Header 10.2.15By Robert C. Lawton, AIF, CRPS, President, Lawton Retirement Plan Consultants, LLC

Welcome to 2016! I hope you had a joyous and restful holiday season. Now it’s back to work!

I believe that every plan sponsor should resolve to consider making the following 2016 401k improvements to their plan: [Read more…]

Why You Shouldn’t Use Custom TDFs In Your 401k

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PSI Newsletter and Website Header 10.2.15
By Robert C. Lawton, AIF, CRPS, President, Lawton Retirement Plan Consultants, LLC

Recently, it has become popular for large corporations to adopt customized target date fund approaches for their 401k plans. Before jumping into why this approach has never made much sense to me, it might be good to start out with a couple definitions.

What are Target Date Funds (TDFs)?

Many mutual fund families have created an integrated series of investment funds with dates in their names. The dates approximate the time period that a participant will turn age 65 and retire. These professionally managed investment funds vary their bond/stock allocation percentages as time goes by so that as a participant gets closer to age 65 his/her allocation becomes more conservative. Target date funds are generally considered to be the most appropriate investment for the vast majority of your 401k plan participants.

What are custom TDFs?

Custom TDFs use a unique set of underlying investments and/or alter the bond/stock percentages significantly for the different funds in the series. These different bond/stock allocations are based upon demographic assumptions unique to the client. The intent is to create a non-standard glide path for the target date series.

Why I don’t like custom TDFs

[Read more…]

Seven Signs Of A Successful 401k

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PSI Newsletter and Website Header 10.2.15

By Robert C. Lawton, AIF, CRPS, President, Lawton Retirement Plan Consultants, LLC

For more than 30 years I have helped plan sponsors create successful 401k plans. During that time I have noticed that a successful 401k plan appears to possess the following seven attributes: [Read more…]

Plugging 401k Plan Leakage

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PSI Newsletter and Website Header 10.2.15
By Robert C. Lawton, AIF, CRPS, President, Lawton Retirement Plan Consultants, LLC

In 2013 Time Magazine reported that one in four Americans tapped into their 401k account. Research from Fidelity indicates that 22% of participants in plans they administer have an outstanding loan. This is troubling because the high rate of 401k plan loan defaults results in annual 401k plan leakage of around $6 billion per year. Boston Research Group reports that 45% of 401k participants who leave a job take a distribution of their account balance. Significant amounts of participant balances are leaking out of 401k plans and not being replenished, with potentially disastrous results.

What is 401k plan leakage?

[Read more…]