In my work with retirement plan administrators and investment advisors, I often consider what is happening in the food industry across the United States. As the population grew, so did the need for more food – that would last longer – that would tolerate shipping and longevity on store shelves – AND be affordable for the masses.
So too has this occurred in the qualified plan industry. More and more vendors have moved into the small plan market, making services more prolific and affordable for the small business owner. Everyone can afford to sponsor a retirement plan.
Mass Production does not Mean Better Food
There is a shift occurring in the food industry. Consumers are realizing that the benefits of “mass production” come at a price. No one really asked what was in the food. It was easy to get and cheap. It appears there were some hidden costs – a hidden expense to what seemed cheap and easy.
The same can be said for the qualified plan market. Most qualified plans go unmonitored – much like the diet of the typical U.S. citizen.
What is most compelling about what is occurring in the food industry today is that the CONSUMER is now taking BACK control of the conversation and the market has been forced to respond. What you are seeing on the shelves today is dramatically different than even five years ago. The market must offer what consumers demand. Consumers are using their wallet as their voice. As the volume of the conversation gets louder, the health of the nation, albeit slowly, improves. Not to sound goofy, but this is my dream for the qualified plan market. I’m ready for ERISA to go organic.
Hidden Ingredients make Retirement Plans Unhealthful
ERISA litigation demonstrates that few plan administrators really know what is in their retirement plan. In 2014, 65% of the near 4,000 plans investigated resulted in a fine or penalty – the average of which equals around $400,000. There IS a cost to not knowing:
- What is in my retirement plan?
- Are my vendors and services still the best option for the best price?
- Am I getting what I am paying for?
- Are there unacceptable conflicts of interest?
- Are fees reasonable?
- Where is the money going?
- Is the plan healthy?
Beyond the cost of the penalties are the costs to participant outcomes. Excessive fees eat away at already meager participant retirement accounts.
Get a Health Checkup for Your Plan
If you need help to determine the health of your plan and the vitality of your fiduciary processes – if you feel your plan would benefit from recommendations to shore up any potential gaps – hidden costs or conflicts that create unnecessary business and personal risk – contact Roland|Criss today.
Our Fiduciary QPR is a snapshot of the quality of the health of your ERISA qualified plan. If there are threats to your plan to which you are unaware, Fiduciary QPR will uncover them – and chart a course for improvement and protection.
