Plan sponsors have significant fiduciary duties once they decide to offer a retirement plan. This means plan sponsors must manage their plans with the best interests of the plan participants in mind. Section 404(a)(1)(b) of the Employment Retirement Income Security Act (ERISA) also requires that the employer manage the plan with “care, skill, prudence and diligence.” This “Prudent Person Standard of Care” can be daunting, but is achievable when plan sponsors have a well thought out process.
As traditional defined benefit pension plans continue to fade from existence, the retirement security of millions of American workers increasingly rests squarely on the shoulders of their 401(k) or other workplace-provided defined contribution (DC) program
As a plan administrator, you know designing the very best retirement plan hinges on strategies, not products alone.
For years many employers who sponsored a retirement plan simply focused on making their employer contribution each year. Sponsoring a retirement plan today, though, is certainly not a “set it and forget it” proposition. In today’s economic climate, and with government focus on the employer’s fiduciary obligation to a company-sponsored retirement plan and its participants, more and more employers are looking for ways to optimize plan performance and gain fiduciary protection.
Dr. Gregory Kasten uses his medical background to improve retirement plan outcomes.