401(k): The Opportunity

401(k): The Opportunity

While at the surface, a 401(k) plan seems pretty simple and straightforward, once you peel back the veneer you begin to realize that there are plenty of complexities and nuances associated with having a 401(k) plan to offer your employees. We’ve outlined some of the basic elements for consideration, and then provided some detail on areas and opportunities for enhancements to your plan.



A 401(k) has a number of areas in which a plan sponsor needs to focus. We’ve outlined each below and identified particular opportunities that may need to be explored regularly by a plan sponsor:
Costs: Hard dollar costs and soft dollar costs are important for a plan sponsor to recognize and evaluate. Recent regulation has provided some simple, yet generic guidance on costs: Make sure the fees associated with your plan are reasonable given the size, scope, and value proposition of the plan. This does not mean your plan has to offer the lowest fees or net costs. However, it does mean that a plan should take into consideration the fees paid vs. the value received and evaluate this for reasonableness.
Employee Communications: One of the central purposes for having a plan is to provide a long term benefit for your plan participants. Proper communication is essential to help aid in the long term success of your participants. Communication tools include:
  • Materials describing plan design and investing

  • Enrollment kits

  • Payroll stuffers, posters, and memos

  • Newsletter.

Recordkeeping: Good recordkeeping is essential for the long-term success of your 401(k) plan. This includes:
  • Participant-level accounting
  • Employee & employer reports
  • Tracking investment allocations/changes and contribution changes.
Technology Services: In this day and age we rely on technology immensely for many facets of life. Your 401(k) is no different. Technology services include:
  • Applications  that enhance plan efficiency & productivity
  • Web-based participant investment tools
  • Web-based employer tools
Investment Management: At the core of each 401(k) plan are the investment offerings. From a participant’s perspective, this is one of the most important parts of the plan. The goal of every 401(k) plan should be to offer long-range solutions for participant success. Many participants have a difficult time choosing, monitoring, and managing their investment selections. We believe that providing quality alternatives makes this task easier for participants and empowers them to make decisions that greatly increase the potential for long-term success.
Compliance: For a plan sponsor, compliance should be a primary focus. With continual regulatory changes, it is important for you to have resources that can guide you in maintaining a compliant plan. Some important compliance considerations include:
  • The plan document
  • Summary plan description
  • Annual 5500 and pertinent schedules
  • ERISA plan compliance
  • Discrimination testing
  • Department of labor rulings
If you feel your plan may benefit from a thorough review of the above mentioned categories, we invite you to contact us for a consultation.

Ben Harvey and Evan Barnes are investment adviser representatives of, and securities and advisory services are offered through, USA Financial Securities Corp., Member FINRA/SIPC. www.finra.org A Registered Investment Adviser located at 6020 E. Fulton St., Ada, MI 49301. Pathway Financial Planning, Inc. is not affiliated with USA Financial Securities.

Ben Harvey and Evan Barnes are authorized to transact securities related business and investment advisory services only in states where they are properly registered. For investment products and services these states include: Ben: (IN; OH) and Evan:(IN). For investment advisory services these states include: Ben: (IN; MT; OH) and Evan: (IN; MT). Additionally, clients who are not residents of these states cannot be serviced. This website is not intended to provide investment, legal, or tax advice, nor to effect securities transactions or to render personal advice for compensation.

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