4. Reevaluate auto enrollment. Because the environment has shifted, with more participants scrutinizing details they previously ignored, this is no time to let auto enrollment go on autopilot. Decide whether it's time to increase auto enrollment contribution rates and whether vesting schedules and withdrawal provisions remain appropriate.
5. Keep an eye on stable value wrap contracts. Federal regulatory agency studies haven't yet announced whether stable value wrap contracts will be exempt from Wall Street Reform and the Consumer Protection Act. Be prepared to adjust offerings when this decision comes through.
Choosing A Partner To Outsource Compliance Headaches
If all that sounds like more trouble than it's worth, consider hosting 401(k) services through another firm. If you manage these plans only rarely, you're probably better off either moving them off your service list or partnering with another firm or advisor who will be more efficient and is willing to take on the liabilities. Opting out of the 401(k) market still requires some homework if you decide to go the partnership route, because careful selection is required to ensure a good fit and that your reputation is protected; their mistakes can certainly tarnish your image with shared clients.
Begin by benchmarking a variety of vendors' 401(k) performance. Meet with the top firms and get a feel for how they do business, whether they're a good match with your company and how they can best service your clients. Define roles upfront to avoid surprises. It's also a great time to review their plans to handle the upcoming compliance issues. Interview company principals to make sure your business philosophies and service standards are aligned.
Darin Gibson, MBA, CFP, ChFC, CLU, is owner and president of Burnham Gibson Financial Group Inc. in Irvine, Calif. Gibson manages $350 million in assets for individual and corporate clients. Burnham Gibson currently manages 401(k) plans for companies ranging in size from 10 to 3,000 employees and partners with other firms to manage such plans.