401k & Retirement
Considering a Safe Harbor Retirement Plan
It may be advantageous for a plan sponsor to consider adopting a safe harbor design for their retirement plan. Adopting a safe harbor retirement plan design permits an employer to essentially avoid discrimination testing (the testing is deemed met). Remember, this testing limits highly compensated employees’ contributions based upon non-highly compensated employees’ contributions. By making […]
Women in Retirement: 60 Percent Not Saving Enough
Some of your participants may be facing these struggles as well. Retirement planning is a daunting task, and women have different struggles than men: Gender pay gap: Women tend to earn less, which translates to lower earnings and savings, as well as reduced Social Security benefits. Cultural expectations: Women are more likely to take time […]
Portfolio Patriotism — Domestic market optimism or inadvertent asset allocation?
Globalization of the world economy has increased exposure to international investments, yet equity portfolios in general remain largely home biased today. This may be a good time for participants to reevaluate their asset allocation to see if they may be exhibiting a home country bias— or displaying overly optimistic expectations about the domestic market and/or […]
Plan-Level Rate of Return—Useful or Useless?
Many people use plan-level rates of return to determine the quality of an investment lineup. However, several variables may impact plan-level rates of return making them not as useful as a plan management tool. They may actually be counterproductive when trying to determine the quality of an investment lineup. As an extreme example, you may […]
Qualified Versus Nonqualified Plans
For most employees, qualified retirement plans are a critical component of their retirement savings strategy. For others, qualified plans place restrictions on their utilization of such plans, so they have to look for other ways to save. That’s why employers often offer both qualified and nonqualified plans. Why are there two classes of plans, and […]
Target Date Funds—Does One Size Really Fit All?
If you have ever opened a brokerage account with an advisor, you know the first step is gathering information to determine the risk profile and appropriate investment allocation for the individual. In order to determine the appropriate allocation for a client, financial advisors will inquire about income level, savings rate, net worth, time horizon, spending […]
Benchmarks Are Not Created Equal
Because benchmarks are an important part of investment due diligence, a plan fiduciary should carefully consider their selection. Two of the most common are FTSE Russell¹ and Standard & Poor’s². The RPAG Scorecard³ utilizes Russell and here’s why: · Russell ranks each company in the investable universe according to its total market capitalization. The […]
New Definition of Fiduciary
As you are aware, in 2016 the Department of Labor (DOL) finalized regulations updating, and expanding, the definition of “fiduciary” in regards to the provision of investment advice. Originally these regulations were set to become applicable in April of this year. The current administration wanted to delay the applicable date to allow the DOL to […]
When Participants Retire, Should Their QDIA Retire as Well?
Many retirement plan sponsors are increasingly recognizing the benefits of allowing retired employees to leave assets in the defined contribution (DC) plan. This arrangement can be a win-win for both plan sponsors and participants. Fat retiree balances may improve plan economics, allowing plan sponsors to negotiate lower fees. And participants can take advantage of funds […]
Fixed Income: A Sinking Ship or Much Ado About Nothing
Time is a powerful modifier of perception and purpose. No need to look any further than the frequent rumblings surrounding fixed income in the current rising interest rate environment. That isn’t to say the frequently touted “bond bubble” and rising interest rate topics are unimportant or overstated, it’s merely a reaction to the volume […]