Plan Structure Change and Review

Keep it as simple as possible

Over the years, we have seen plenty of poorly designed 401(k) Plan investment structures. The most common error is too many funds or too few asset classes, and yes, both may apply at the same time. It is also very common that the Plan is not capturing all available revenue sharing from the Plan investments. Conversely, it is all too rare that we see a 401(k) Plan design that is customized for the specific risk profile of the Plan participants.

401(k) IPS can help improve the 401(k) Plan investment structure through recommendations to:

• Eliminate investment options with overlapping styles
• Add new asset classes to enhance diversification opportunities
• Customize the Plan design to the specific needs of the Plan participants

For those Plans without a strategy for capturing the excess revenue share dollars generated by the Plan’s investments, we can help negotiate a new structure with your service providers that will likely save money for the Company and the Plan participants.

Plan Design Check

1. Does your 401(k) Plan include a tier of low-cost index options?
2. If your Plan offers employer stock, are there sufficient limits to prevent speculative activities that are contrary to the goals of the retirement plan?