401k changes

What 401k changes are you considering for your plan in 2020? Most leading edge employers will have the following items on their list of 401k changes for the coming year.

Consider These 401k Changes


Every aspect of 401k plan administration and consulting is under intense fee pressure. If you haven’t reviewed your provider fees within the last three years — as the Department of Labor recommends — make sure you do so in 2020. You will be surprised at the changes. It is reasonable to expect a fee reduction from each provider (investment adviser, trustee, custodian, recordkeeper and auditor) you evaluate.


The 401k plan market is hyper-competitive. Providers and consultants are constantly adding features to better serve their clients. Make sure you consider the following 401k changes relative to plan features:

  • Roth 401k contributions

  • Roth in-plan conversion option

  • Financial wellness education, including on the use of Health Savings Accounts (HSAs) if offered

  • Emergency or sidecar savings accounts

  • More than one level of options for participant investment advice

  • Mutual fund share classes that have no revenue sharing

  • ESG investment options

  • Auto-enrollment

  • Auto-escalation


Your adviser should be leading an evaluation of your fund lineup every year. Make sure that you offer at least one managed, balanced investment option such as target date funds. In addition, talk to your investment adviser about bolstering the conservative options in your plan.

Correlations have normalized significantly. Do you offer the right actively managed funds to take advantage of a more typical investment environment?

It is clear millennials look at environmental, social and governance (ESG) criteria when investing. Does your plan provide ESG information on your fund options? Do you offer any ESG investment options?


Make sure that the investment adviser you work with has signed on to your plan as a fiduciary. It is uncommon these days for plan sponsors to work with investment advisers who are not fiduciaries.

Be aware that investment advisers who work for brokerage firms, banks and insurance companies will continue to be held to a lower fiduciary standard than advisers who work for Registered Investment Advisory (RIA) firms.

If you wish to work with an investment adviser who will sign on to your 401k plan without fiduciary limitations, hire an adviser employed by an RIA. If your investment adviser can’t or won’t act as a fiduciary, find another one.


Work with providers that are right for your culture. You have a tremendous amount of choice in the 401k world. Your providers should make your 401k plan easier for you and your participants to understand and be fun to work with!

Make sure you consider these important 401k improvements to ensure you offer the best 401k plan possible to your employees.


About the Author

Robert C. Lawton, AIF, CRPS is the founder and President of Lawton Retirement Plan Consultants, LLC. Mr. Lawton is an award-winning 401(k) investment adviser with over 30 years of experience. He has consulted with many Fortune 500 companies, including: Aon Hewitt, Apple, AT&T, First Interstate Bank, Florida Power & Light, General Dynamics, Houghton Mifflin Harcourt, IBM, John Deere, Mazda Motor Corporation, Northwestern Mutual, Northern Trust Company, Trek Bikes, Tribune Company, Underwriters Labs and many others. Mr. Lawton may be contacted at (414) 828-4015 or bob@lawtonrpc.com.

About Lawton Retirement Plan Consultants, LLC

Lawton Retirement Plan Consultants, LLC (LRPC) is a Milwaukee, Wisconsin-based independent, objective Registered Investment Adviser (RIA) providing investment advisery, fiduciary compliance, employee education, provider management and plan design services to employer retirement plan sponsors. The firm specializes in Socially Responsible Investment (SRI) strategies for retirement plans and is a pioneer in the field. LRPC currently has contracts in place to provide consulting services on nearly a half billion dollars in plan assets. For more information, please contact Robert C. Lawton at (414) 828-4015 or bob@lawtonrpc.com or visit the firm’s website at https://www.lawtonrpc.com. Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser.

Important Disclosures

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance, tax, legal or investment advice. Each plan has unique requirements and you should consult your attorney or tax adviser for guidance on your specific situation. In no way does Lawton Retirement Plan Consultants, LLC assure that, by using the information provided, a plan sponsor will be in compliance with ERISA regulations. Investors should carefully consider investment objectives, risks, charges and expenses. The statements in this publication are the opinions and beliefs of the commentator expressed when the commentary was made and are not intended to represent that person’s opinions and beliefs at any other time. The commentary does not necessarily reflect the opinion of Lawton Retirement Plan Consultants, LLC and should not be construed as recommendations or investment advice. Lawton Retirement Plan Consultants, LLC offers no tax, legal or accounting advice, and any advice contained herein is not specific to any individual, entity or retirement plan, but rather general in nature and, therefore, should not be relied upon for specific investment situations. Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser and accepts clients outside of Wisconsin based upon applicable state registration regulations and the “de minimus” exception.