This episode is a great example of how competitive the 401k industry has become over the past several years, and why plan sponsors need to keep their plans up to date with consistent benchmarking exercises. We've selected audio clips from a recent Qualified Plan educational webinar that Josh hosted with Matthew Eickman, the National Retirement Practice Leader for Prime Capital Investment Advisors & Qualified Plan Advisors. In this episode, Josh and Jay provide context to the Benchmarking content provided by Matthew, particularly around how benchmarking a 401k plan can potentially uncover decreased costs for plan participants while also fulfilling some of the Plan Sponsor's fiduciary responsibilities. Benchmarking can seem like an intrusive, time consuming process, but the reality is that a confidential analysis of an existing plan can often be completed in a matter of days, and it doesn't always result in a plan change.

Josh is connected to Prime Capital Investment Advisors and Qualified Plan Advisors. His company, Gulf Coast Financial Advisors, is part of their network of independent advisors, which gives him the support of a multi-billion dollar investment company but still provides for independence and ownership of his practice.

Key Takeaways:

• When considering a benchmarking exercise, Plan Sponsors should compare their situation to the Health Insurance shopping process, in that:
• • A benefits provider wouldn't wait 5 or 10 years before seeking a health insurance quote. Plan Sponsors should not wait 5 to 10 years to benchmark their plan
  • Benefits provider wouldn't go to the current carrier to ask if the price is reasonable. Plan Sponsors should not rely solely on the feedback of the current record keeper
  • Just as with health insurance, there are many aspects that determine the overall success of a 401k Plan. Plan Sponsors should avoid analyzing only one aspect of any proposal
• The generally held legal interpretation is that a plan sponsor / business owner need to benchmark their retirement plan every 3 years to stay compliant.
• The are 4 primary reasons you should regularly benchmark your 401k Plan:
• • Department of Labor regulations
  • Litigation, particularly with federal courts
  • Rapidly changing marketplace, such as fee compression
  • Getting the best plan available for your plan participants – put them in a position to success long term
• One of the reasons you benchmark is to make sure you are paying appropriate fees in your 401(k) plan.
• It's recommended to have a 3rd party conduct the benchmarking to avoid any conflicts if the record keeper themselves benchmark the plan.
• There are quality companies that provide benchmarking services for a fee. One way you can reduce costs is to have your plan blindly competitively bid, that is, take the plan to market without any identifying company information and see what offers are out there for your plan.
• You may be surprised how competitive the market is for your plan. Maybe you don't want to move the plan – you can use the benchmarking results to negotiate with your current plan provider!
• Benchmarking does not take a lot of time – you can gather the needed information in a matter of minutes – and the time to review the results with a professional is just a few hours, time well spent if it saves you and your plan participant money and increases the competitiveness of your plan.
• Benchmarking goals:
• • Positive outcomes could possibly be better pricing, better service or some combination of both
  • Do NOT fear a move: The goal is to not transition the plan – this happens only if the benchmarking results show that the current situation is inferior

Show Links:

https://gulfcoastfa.com/

https://gulfcoastfa.com/401k-forum

https://pciawealth.com/

https://qualifiedplanadvisors.com/

https://fitrusts.com/

https://everydollarcounts.libsyn.com/

http://jaystubbs.com/

https://www.firstprotective.com/

https://www.deepfriedstudios.com/

https://www.slothracerband.com/

Resources:

Gulf Coast Financial Advisors

Prime Capital Investment Advisors

Qualified Plan Advisors

Financial Fitness for Life

First Protective

If any of these topics apply to your situation, we can help! Reach out to us at 251-327-2124, or email [email protected].