You will be surprised at many of these.
For more than 30 years I have helped plan sponsors design and manage successful 401k plans. From Apple and IBM to John Deere and Mazda Motor Corporation, I have had the privilege of working with a number of great Fortune 500 plans, as well as hundreds of excellent small and medium-sized plans. I have observed that the best plans always seem to possess the following seven attributes.
Having worked as a 401k plan consultant and investment adviser for more than 30 years, I have seen a wide variety of plan designs.
Many 401k plan sponsors have opted to periodically re-enroll all their participants into the Qualified Default Investment Alternative (QDIA) in their 401k plans. You may wish to re-enroll your participants since doing so benefits plan sponsors as well as participants.
Making Roth 401k contributions appears to be better for everyone!
A few changes can make your good 401k plan into a great one. To help your 401k plan achieve greatness, consider making the following 401k plan improvements this year.
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.
At the very least, your Investment Committee should have a discussion about the topic. Here’s why.
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.
Recently, it has become popular for large corporations to adopt customized target date fund approaches for their 401k plans. This approach has never made much sense to me.