So you are the fiduciary for the retirement plan at work? Do you like the responsibility? How many hours a year do you spend ensuring that your employees have a good plan? Is your current plan overpriced? Do you have any idea at all? Or do you do the best you can, and, well, no one is complaining all that much, anyway?
What are the consequences if your plan has unnecessary fees? What affect will it ever have on you? None of your employees is ever going to sue you, right? Sure, you might have heard of a few lawsuits at other companies, but that will never happen at your business.
As it currently stands, you are held to a fiduciary standard in managing your plan. As such, you are required to always act in the best interest of your employees and behave in a prudent manner, blah blah blah. But that sounds a bit theoretical, doesn’t it? Doesn’t that really only apply to big companies?
What would be a sure fire way to get the attention of all employers? How could the Department of Labor improve retirement plans overnight? How could they make sure that all workplace plans, regardless of size, eliminated conflicts of interest and unnecessary fees. Fee disclosure? They tried that and it worked a little, but not much.
I would suggest the introduction of a new standard. Let’s call it the YOUR EMPLOYEES MOVE IN WITH YOU standard. With this new standard, if your employees can demonstrate that your plan has unnecessary fees (which they can for most plans), the court will calculate how much these fees have cost each employee over time, translate that cost to months of retirement income, and, let the fun begin!
Look around your office. Do you like your colleagues? All of them? Do you want them to move in with you? Just for a while. Maybe 2 to 4 months. In extreme cases, 1 year or so. Imagine this for a while. How about crazy Jack? Or Linda? OMG! No, not Linda. How does your future look now? This new standard would ensure that you have the best plan you can – today!! This would instantly become the number one priority of all fiduciaries.
Managing other people’s money is serious business with real consequences. Your decisions today directly impact your employees’ quality of life in the future. Most plans for smaller employers are riddled with unnecessary fees and can be dramatically improved. Of course the DOL would never implement this type of standard, but if they did it would ensure that every employee has a much better plan and better prospects for retirement.
I’m just sayin’!