Saving for retirement should be easy, but there’s a host of federal regulations and financial considerations that can make providing a reasonable plan to your employees complicated. That’s where having a trustworthy 401k program provider becomes incredibly important. A provider is responsible for ensuring that the entire plan functions (including handling various tasks like onboarding new participants and filing the appropriate forms) and that it does so legally and to the benefit of both the sponsor and participants. Businesses can find a bundled or unbundled solution for each aspect: non-producing administrators (i.e., focus on compliance), record keepers, and fiduciaries (i.e., investment managers that take on a certain amount of liability), trustee and custodian.
Of course, it’s critical that you do your due diligence when selecting these providers. In 2016, the U.S. Department of Labor hired nearly one thousand new employees to help the auditing process, and when noncompliance is discovered, it can result in civil charges that can lead to hefty fines. New regulations went into effect in June 2017 which define who is a fiduciary, as well. That means you need to know who you’re hiring and thoroughly review them.
Check Into Potential Providers
The first step is to look into their history as a provider. Check with sources such as the BBB and the DOL Employee Benefits Security Administration. Be sure to look for evidence or complaints regarding ERISA compliance. If a provider is under investigation by the DOL or has been brought up on charges, etc., then it’s best to move on to a new candidate.
Questions to Ask Candidates
- What can you tell us about the history of your company and executives? Have you had any BBB or EBSA/SEC complaints?
- Will you serve as an ERISA fiduciary and/or a discretionary investment manager/named investment fiduciary and attest to that in writing?
- Will you disclose in writing any potential conflicts of interest and attest in writing that you will serve the plan without any conflicts of interest, as defined by the DOL?
- Do you provide a proprietary recordkeeping platform or utilize a partner’s platform?
- Do you provide compliance and plan auditing support?
- Do you provide rollover or distribution assistance?
- Do you provide education (face to face or online) programs to plan participants?
A History of Trust
Caldwell Trust Company has a history of service that stretches back nearly a quarter of a century, and we’ve always operated with personalized care through unique, discretionary trustee services to build strong loyalties that span across generations. We do everything to take advantage of the latest advances in technology to minimize program fees. We also take the extra step to provide what many providers do not: investment counseling for groups and individuals.
The rules and regulations for how retirement plans are handled by businesses are changing, and at the end of the day, it’s you as a fiduciary that’s responsible for every decision made. Protect yourself and your employees’ investments by proactively selecting the right plan administrator for your program. Contact us today to select Caldwell Trust Company for individualized service and quality performance that you can depend on well into the future.
