Top of Mind


Retirement Plan Outcomes: The Missing Puzzle Piece

Most retirement plan sponsors, particularly large ones, have spent quite a bit of time and effort ensuring that their plans can survive an IRS Audit, DOL investigation, and/or litigation by closely reviewing investment arrays and fees. However, there is one simple and straightforward topic that has not been the subject of litigation, nor is it likely to be part of any IRS/DOL audit. However, it is critically important to the success of any retirement plan.

Plan outcomes - how well or poorly the retirement plan fares in comparison with peers - is the missing puzzle piece for many retirement plan sponsors. Plan sponsors should be asking themselves the following: What is the plan’s growth, net of fees, in comparison to peer plans? What about the median participant account balance? What is the percentage of participants who are on track to retire on time with enough retirement income? And for those not on track, are they sufficiently engaged (or have they even logged into the recordkeeper website?) with plan initiatives to help improve their financial picture?

A plan sponsor can have a best-in-class investment array and extremely low fees, but if the participants cannot retire on time because their retirement account balances are insufficient, then the whole purpose offering a retirement plan is defeated! Not to mention the myriad of issues created when employees are forced to work past the age that they would normally retire.

Don’t believe me? Check out this Forbes article from Fred Reish, a leading ERISA attorney. He is well aware of IRS/DOL audits and fee litigation, but he chose employee outcomes as the number one mistake that retirement plan sponsors make.

So, for plan fiduciaries out there, try to spend at least a little time on plan outcomes at your next due diligence meeting. Even better, spend some time on that subject at EVERY due diligence meeting. Trust me, you’ll be glad you did!

Has your plan been addressing outcomes? I would love to hear from you on LinkedIn, Twitter or at info@cammackretirement.com !

Note: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

Investment products available through Cammack LaRhette Brokerage, Inc.
Investment advisory services available through Cammack LaRhette Advisors, LLC.
Both located at 100 William Street, Suite 215, Wellesley, MA 02481 | p 781-237-2291