How Your 401k Participants Can Use Active Management

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PSI Newsletter and Website Header 10.2.15

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

A passive portfolio management approach is appropriate for many 401k plan participants. But indexing isn’t right for everyone. Many 401k plan investors are not satisfied with market average returns. Nor do they feel it makes sense to lock-in 100% of every market decline. Many 401k plan participants believe they can consistently outperform market averages by applying a little of the right knowledge. Think there is no point to active management? Consider the following to make active management work in your 401k plan account: [Read more…]

401k RFP Tips For Employers

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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 my Registered Investment Advisory (RIA) firm has been fortunate to receive a number of Requests For Proposals (RFPs) for investment advisory services. While I am grateful to receive these RFPs, I continue to be puzzled by how some plan sponsors choose to manage their RFP process. So, outlined below, I have provided some tips on how plan sponsors can optimize their 401k RFP process to ensure it produces the best possible result. [Read more…]

What 401k Plan Sponsors Want To Know About The New Fiduciary Regs

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

Since the Department of Labor released its final fiduciary compliance rules, there has been a tremendous amount of media coverage devoted to what plan sponsors need to know about the new fiduciary regs. Although much of it has been well written with good intentions, most of it has been wrong and has only served to confuse plan sponsors. Based on what I am hearing from plan sponsors, following is what you say you want to know about the new fiduciary regs: [Read more…]

New Fiduciary Regs: A Win For Plan Sponsors

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

On Wednesday, April 6, 2016 the Department of Labor (DoL) issued its final fiduciary regs for investment advisors working with retirement accounts. The rules were aimed specifically at brokers who provide investment advice to clients under the “suitability” requirement (which exempted brokers from being fiduciaries). The issuance of these final fiduciary regs ends a long war that the brokerage industry waged against regulators, employing all manner of threats to avoid fiduciary responsibility (e.g.; small clients will not be able to receive investment advice — absolutely ridiculous) and spending millions on intense political lobbying. Who won? Remarkably, plan sponsors!

What is a fiduciary?

[Read more…]

Does Your 401k Investment Adviser Measure Up?

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

Each year retirement plan sponsors should take time to evaluate their providers. Included in this group is your 401k investment adviser. Most plan sponsors use an investment adviser to help them with their 401k plans. This is a smart decision since many advisers are able to save plan sponsors at least as much as they charge. How can you tell if you are working with the right 401k investment adviser?

Top advisers: [Read more…]

Should Your 401k Plan Offer ESG Investment Options?

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

At the very least, your Investment Committee should have a discussion about the topic. Here’s why. [Read more…]

Help Your 401k Participants Manage Risk

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

Ameriprise recently conducted a survey of investors aged 25 to 70 with regard to their views on risk. The survey sample can be considered a good representation of almost any group of investors, including those in your 401k plan. Using the survey results, Ameriprise classified investors into four categories. Outlined below are the categories along with my thoughts on what you can do as a plan sponsor to help these 401k plan participants become better investors in your 401k plan. First, it might help to better understand risk. [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…]

Why TDFs Are The Best Professionally Managed 401k Investment Option

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PSI Newsletter and Website Header 10.2.15

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

There has been quite a bit written recently, most negative, about target date funds (TDFs).  It is hard for me to understand why since TDFs provide 401k plan participants with: [Read more…]

401k Executive Benefit Opportunity Results From Weak Markets

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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 bad equity markets have one silver lining for those executives in your organization that might have large 401k account balances: In-plan Roth 401k conversions.

Why now?

Most of us have experienced significant declines in the value of our 401k account balances as a result of weak equity markets. For executives, these losses may have been even greater if they had a well diversified 401k account with a heavy allocation to equities and exposure to commodities. These executives may have unrealized losses in their accounts of as much as 20% or 30%.

Converting pre-tax 401k balances into after-tax Roth 401k balances results in taxation of the previously tax-free amounts. Converting when the account value is lower may result in a substantial tax savings. Following is an example.

Example of in-plan Roth 401k conversions [Read more…]