Many small and medium-sized businesses want to offer a competitive retirement plan that their employees appreciate. But beyond the initial setup, maintaining a plan requires time, money, and liability many business owners worry about committing to.
A consultant for your retirement plan plays an important role in your business, helping you follow fiduciary responsibilities, mitigate risk, and provide an appropriate plan based on cost parameters and employee needs. Businesses rely on consultants to provide objective and knowledgeable guidance, advice, and service.
The extent of services provided by consultants can vary significantly, and many financial services firms shy away from offering comprehensive retirement plan consulting because of the numerous rules and regulations. However, at DeLong & Brower, P. C., we excel in the 401(k) space and, over the years, we’ve developed a strategic system that allows us to service the many needs of a 401(k) for the plan sponsor and participants. Here, we’ll dive into how you can improve your 401(k) plan offering and how we can help.
Today’s Retirement Landscape
Today’s retirement landscape is vastly different than it was a few decades ago. Your parents likely had pensions and savings. Today, few companies offer pensions and their 401(k)s may feature high-cost investments or too many options. As a result, more and more people are not ready for retirement. According to the Center for Retirement Research at Boston College, 52% of pre-retirement households are at risk of not being able to maintain their current lifestyle when they retire. This is a problem.
In order for businesses to better prepare their employees and help them retire on time, it’s important to ensure your 401(k) plan is beneficial for both you and your employees.
The Key to Successful Outcomes
How would you currently rate the success or effectiveness of your 401(k) plan? It’s difficult to gauge, but you can start by evaluating a few questions:
- How many of your employees are participating in your plan and to what degree? If you’re offering a plan, you ideally want a large majority to participate in it and to contribute at least 5% or so. If you look at your plan, who are the employees that are contributing?
- Are your employees saving enough for retirement? What are your current plan deferral rates? How much are your employees saving and are they consistently saving more each year?
- Are your employees investing responsibility? Look at the lineups available and chosen. Are most employees taking the easy road and automatically picking a target date fund? Are they taking advantage of any resources you offer for guidance?
You can control many of these factors. You just need to know how. The first step is take your employees’ financial pulse. One way to do this is to utilize a third-party firm, like ours, that can conduct a survey to help you determine your employees’ views and retirement knowledge.
Understanding Fiduciary Responsibilities
Due to new regulations, liability and fiduciary concerns are at an all-time high. When it comes to your company’s retirement plan, it’s essential to work with a consultant who provides fiduciary care. Your consultant should confirm their role as a fiduciary in writing and orally so you can ensure that their decisions are made with your best interests in mind. One way to determine a consultant’s level of fiduciary support is to learn more about their process. How do they avoid conflicts of interest and create a plan that is specific to your goals and needs?
At our firm, our process involves an end-to-end analysis of your retirement plan and objectives, including reviewing costs, identifying gaps, and evaluating opportunities for improvement and growth. Our services run the gamut so we can take on most of the responsibility, saving you time, energy, and resources.
Improving Participant Success
Unfortunately, most small and mid-size plan sponsors don’t have the technical knowledge to produce better participant results. This means they need to rely on advisors and providers to provide guidance and advice.
At DeLong & Brower, P. C., we’ve spent years developing a system we think goes above and beyond the average offering. Our system features a three-tier approach:
- Participant education. Without an understanding of their options, your employees may have difficulty understanding what options to choose or how much to contribute. We offer one-on-one education on-site with the goal of producing better results and getting employees more involved and on track for retirement. We find that group education works better for general topics. Through one-on-one meetings, employees can feel more comfortable opening up and sharing details about their financial lives so we can provide personalized advice.
- Retirement income projections. Our Retire 360 program is a holistic financial planning system. Using advanced technology, we can help your employees make detailed income projections to help them evaluate how much they need to contribute to reach their specific goals. Every employee also receives their own personal financial website with access to a financial advisor, CPA, and insurance specialist.
- Investment advice. The most common question employees ask is, where do I invest my money? We’ll work with your employees to understand their investment options and which make the most sense for them.
How We Work with You and Your Participants
We have a unified plan success goal for every business with whom we work. Clients who work with us receive a number of benefits, including:
- A target income replacement of 70% of their final average compensation
- Knowledge regarding when versus if they can retire
- Written and measured short, mid, and long-term financial goals
- The ability to earn more interest
- Resources for Estate Planning
- Immediate access to all their financial documents, assets, and investment data
- A comprehensive financial analysis
Do You Want to Be Part of Our Program?
Hiring a qualified retirement plan consultant that provides the best and most appropriate advice for a retirement plan and its beneficiaries ensures you are closer to fulfilling your fiduciary role.
If you’d like more information or guidance on the services offered by retirement plan consultants, we’d be happy to meet with you. Call us today at 616-396-0500 or email firstname.lastname@example.org.
Joel Johnson, AIF® is an Investment Advisor Representative with DeLong & Brower, P. C., a Holland, Michigan accounting, retirement consulting, insurance, and financial services firm. He specializes in providing comprehensive wealth management and retirement plan consulting for individuals, families, retirees, and business owners. Along with more than 15 years of industry experience, Joel is an Accredited Investment Fiduciary® and a Chartered Federal Employee Benefit Consultant. To learn more, visit www.cpaholland.com.