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401k "advising"
Posted on 6/3/19 at 3:05 pm
Posted on 6/3/19 at 3:05 pm
How much "advising" is appropriate for a plan sponsor during enrollment? What I mean is, if a sponsor were advising employees to contribute as much as possible without knowing each employees personal situation, and speaking to employees who I would classify as not knowledgeable of personal finance or investing, would that be appropriate? What are the guidelines in such a situation?
5
Posted on 6/3/19 at 4:19 pm to BurlesonCountyAg
Do you work for Enron?
Posted on 6/3/19 at 4:21 pm to Dead Mike
No.
Posted on 6/3/19 at 4:49 pm to BurlesonCountyAg
Make sure you have a default investment vehicle like a target date fund.
I wouldn’t give any advice to employees as an employer.
Let the plan administrator come in and do the education (fidelity, principal, mass mutual, or the advisor on the plan).
You don’t want that liability on your hands as the employer.
I wouldn’t give any advice to employees as an employer.
Let the plan administrator come in and do the education (fidelity, principal, mass mutual, or the advisor on the plan).
You don’t want that liability on your hands as the employer.
This post was edited on 6/3/19 at 4:51 pm
Posted on 6/3/19 at 5:31 pm to BurlesonCountyAg
Is the sponsor just advising the employees to defer a higher percentage of their pay into the plan, or specifying which funds they should be invested in? They probably shouldn't be doing either one, but I think the second situation is much more troublesome, especially if the sponsor's own stock is available to purchase and they're steering people toward that.
Posted on 6/3/19 at 9:24 pm to BurlesonCountyAg
I advise them to participate in the 401k and how it works (when you can enter the plan, when you can increase or stop, how the match works, vesting, etc. and the different investment options (default vs active vs passive management) and the asset clssses.
Posted on 6/3/19 at 9:26 pm to Serraneaux
I also tell them that our plan is recommending to save 15% now (from 10%). If they can’t or don’t want to do that I tell them to contribute enough to get the full match which is 6%.
Posted on 6/4/19 at 4:19 pm to BurlesonCountyAg
Saying "as much as possible" does seem to be taking their situation into account. If 3% is as much as possible for someone and 5% is as much as possible for another, that's not crossing any lines I don't think. They just want to pass their testing...
If they said "do 10%" to everyone, that may be.
If they said "do 10%" to everyone, that may be.
Posted on 6/7/19 at 8:04 pm to Serraneaux
Any employee that doesn’t at least match company’s contribution will be the loser in the long run
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