Business Insurance
Menu
View all articles

401(k) Plan Sponsor Guidance

Learn how COVID-19 impacts the role of the Plan Sponsor through ABD’s Retirement Services reference guide.

The spread of the coronavirus (COVID-19) has impacted communities, organization, and individuals throughout the world. Volatility continues to permeate the domestic and international markets as local, state, and the federal governments implement containment strategies and relief measures.

The Employee Retirement Income Security Act (ERISA) of 1974 established the role of the Fiduciary to the stewardship of employer sponsored retirement plans. As Fiduciaries, Plan Sponsors are required act solely in the interest of plan participants including, but not limited to, providing a diverse array of investment options, following a set process to review the plan investments, fees, and documenting their actions.

Plan Sponsors should consider the following as we navigate these unprecedent times:

Participants

Ensure participants have access to information on the following:

  • vendor website, mobile app, direct phone number
  • Where to find information on their plan’s investment offeringsperformance & fees
  • How to change their contribution rate
  • How to access their money in the event of financial hardshiploan or hardship withdrawal
  • (e.g. tax advisor, financial planner) to determine if adjustments to their 401(k) are the right course of action

Process

  • Perform regularly scheduled 401(k) Committee Meetings
  • Follow the Investment Policy Statement
  • Concentrate on relative performance measures vs. absolute returns (e.g. peer performance, expense, etc.)
  • Review performance in relation to current market environment, emphasis on long-term performance

Procedures

Consider administrative processes to ensure the highest level of flexibility for participants with respect to:

  • Changing contribution rates
  • Initiating a loan
  • Requesting a hardship withdrawal

Company Expense & Cash Flow

If there are cash flow or expense concerns, consider the following:

  • Review plan fee structure for potential changes
  • Fund your employer match at year end and/or change match to discretionary

 

The information provided is not “investment advice” as defined by ERISA. This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy or sell securities, and is not provided in a fiduciary capacity. The information provided does not take into account the specific objectives or circumstances or any particular investor, or suggest any specific course of action. Investment decisions should be made based on an investor’s objectives and circumstances and in consultation with his or her advisors.

ABD Retirement Services, Member FINRA/SIPC. ABD Retirement Services is a registered investment advisor. Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the Firm by the Commission. ABD Retirement Services does not provide legal, accounting or tax advice. 


Newfront Retirement Services Team

About the author

Newfront Retirement Services Team

Retirement Services

Drawing on their extensive investment and ERISA experience, the Newfront Retirement Services Team puts employees on the right track for success. They believe retirement readiness means achieving total financial wellness.


The information provided is of a general nature and an educational resource. It is not intended to provide advice or address the situation of any particular individual or entity. Any recipient shall be responsible for the use to which it puts this document. Newfront shall have no liability for the information provided. While care has been taken to produce this document, Newfront does not warrant, represent or guarantee the completeness, accuracy, adequacy, or fitness with respect to the information contained in this document. The information provided does not reflect new circumstances, or additional regulatory and legal changes. The issues addressed may have legal, financial, and health implications, and we recommend you speak to your legal, financial, and health advisors before acting on any of the information provided.

Share this article

Keep up to date with Newfront News and Events—

Recommended reading

CARES Employee Resource Group Helps Parents and Caretakers Connect at Newfront

August 4th 2022

View all articles