10 Things I Know About... Employee retirement plans
Jeremy David, senior vice president of wealth management, People's United Bank
10) Choose the right plan type. Make sure you work with a service provider who can objectively counsel you on the differences and nuances among plan types.
9) Design a smart plan. A proper plan design includes selections such as employer matching contributions, investment options, participant eligibility, vesting and the availability of loans and hardship provisions.
8) Understand your liability. Understand your personal liability as plan sponsor and know the crucial differences between an ERISA 3(38) Discretionary Trustee and a 3(21) Directed Trustee.
7) Offer high-quality investment options. Having a disciplined investment process of evaluation, selection and monitoring is crucial.
6) Minimize plan expenses. Keep plan expenses low and make sure they are reasonable in comparison to other plans of your size by offering low-cost, no-load institutional share mutual funds with low expense ratios.
5) Pay attention to compliance matters. Confirm that your current plan service provider handles all of the ongoing reporting, testing and recordkeeping requirements of your plan.
4) Provide educational resources. Make sure your plan service provider conducts in-person meetings with your employees at least annually to ensure that they understand their plan.
3) Communicate effectively. Make sure that plan service provider gives you the information you need to share with participants in order to meet your regulatory obligations.
2) Favor local expertise. Successful, long-lasting business relationships will always depend on the accessibility and responsiveness of competent and friendly people who live and work in your community.
1) Go easy on your staff. Coordinating and administering a retirement plan can be a time-consuming job for someone inside your company. Delegate this responsibility to a plan service provider with integrated plan technology and automation.
Jeremy David is senior vice president of wealth management at People’s United Bank. Contact him at Jeremy.David@peoples.com.
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