Originally Posted by Stephen
The future of the 401k world depends on if the DOL is ever going to grow any teeth. Most plan sponsors have no idea that they have a fiduciary responsibility to their participants.
I think that we could see the qualified retirement plan space become much more specialized on smaller plans like they are on larger plans.
I completely agree. Plan Sponsors (the business owner on most small plans) can even be held personally liable for participants investment performance if the plan is not 404c compliant.
The problem is getting the Sponsor to realize how much liability they really have. All small plan sponsors care about is the fund selection and fund performance. They dont even realize that chasing performance could land them in a world of hurt, especially on a non 404c plan.
I cant tell you how many owners start off 401k conversations with "well what kind of funds do you put in your 401k?".
I usually reply with something about top rated institutional class funds... then I follow it up with something about a selection process and plan design that ensures minimal business and personal liability. Sometimes I get the point across and other times I dont. Lawyers are a good one to talk about it with.
One nice thing is that there are plenty of turn key options out there for Sponsors of small plans. From 404c compliance to 3(21) or 3(38) fiduciary services. More and more options are available now at reasonable prices.
But the small plan market is definitely becoming more and more specialized. Before Sponsors would just use their stock broker most of the time. If not them then usually the group benefits guy who often was not an expert by any means.
Im making retirement plans in general my focus going forward. I plan to do employee benefits too, but most of the benefits I plan to sub out for a cut.