401(k) plans – are you in compliance?
The Next Step
One year ago, we wrote about a Department of Labor (DOL) statistic stating 77% of
401(k) plans are non-compliant in some form. As a result, the DOL has added almost
1,000 employees to their payroll with 70% of those added to the enforcement division.
A recent article in BenefitsPro magazine listed 5 risks for plan sponsors now that the
408(b)(2) disclosures are out. The highest ranked risk, plan sponsors must determine if
the fees they pay are reasonable.
If you have read our blogs in the past, you know this is a major risk and should be a concern for most plan sponsors since a majority of them do not know their plans total cost or that this is a requirement. Remember, according to the DOL, ignorance does not relieve plan sponsors of their fiduciary responsibilities.
As a plan sponsor, you may still be in shock from your recently received 408(b)(2) fee
disclosure documents. But think about how participants will react when they see these
fees — according to an AARP survey, 65% of plan participants thought they paid zero
fees in their 401(k) plans. As you may know, plan sponsors are required to furnish their participants with this information by August 30th.
So the question is “what is the next step?”
Your next step is to be prepared to answer participant questions regarding the fees they pay, we can help. Simply call LCM Capital Management at 312-705-3013 or emailing us at: firstname.lastname@example.org. We will provide you with an independent, objective fee benchmarking analysis specifically for your plan. Turnaround on our custom benchmarking reports is currently three weeks.
– LCM Capital Management, our Retirement Plan and Wealth Management Advisors.