Prospect questions

In order for plan fiduciaries to take advantage of the protections of ERISA Section 404(c), the plan must meet the following requirements:

• The plan must be an individual account plan
• The plan provides participants with an opportunity to exercise control over assets within their own account
• The plan allows for participants to choose from a broad range of investment alternatives

ERISA Section 404(c) provides relief from breach of fiduciary responsibility where participants are allowed to direct their own investments and the many requirements enabling participants to make informed investment decisions are satisfied. Specifically, where participants in a defined contribution plan are allowed to direct the investment of the assets in their account, the plan fiduciary may avoid liability for losses resulting from investment decisions made by participants who are exercising control over their own plan accounts if the plan complies with all 404(c) requirements.

Tell us what investment choice means to you.

• If you already offer a retirement plan, does it require you to offer proprietary funds?
• How many investment options do you offer today? Is it enough? Too many?
• Are you happy with the diversity of mutual funds? The performance?
• Are you investing in retail mutual funds or annuity sub-accounts?
• How would you rate your employees' investment savvy?
• Do you (or would you like to) offer account types for specific groups of employees, like:
  • Savvy investors
  • Participants not comfortable with independently selecting mutual funds
  • Participants nearing retirement
• Does your plan have a qualified default investment alternative (QDIA)? If so, how did you select your QDIA?
• When was the last time you reviewed the investments available in your company retirement plan? Did you document that process? How?
• Does your plan offer "Professionally Managed Accounts" or "Active Money Management"? Lifestyle funds and Target-Date Retirement funds typically are not actively managed.

Tell us how we can help.

• If you already offer a retirement plan, do you feel you have the support you need to confidently run your plan?
• What's your biggest retirement plan management headache?
• How much staff time is devoted to managing your plan?
• Do you have a team that offers the specific support you need?
• If you could change one thing your current provider/financial professional is doing, what would that be?
• How often are your employees getting educational information regarding your company retirement plan?
• Are you or your employees on track to replace 70% of your current income in retirement? Do you know how much you need to save in order to get there?

Tell us what will help your employees.

• Describe your typical enrollment process.
• Does your current financial professional provide education and support for employees?
• Do your employees think your retirement plan offer is competitive — and a real benefit?

Tell us how comfortable you are managing your legal responsibility.

• Do you worry about your personal legal risk?
• Do you have a current investment policy statement?
• How often do you hold trustee meetings to review plan investments?
• How often do you meet with your financial professional?
• Are you aware the Department of Labor (DOL) recently hired 2,000 new auditors? Their target is smaller plans; are you prepared for a visit from them?
• Have you complied with the DOL regulations with regards to 408(b)2 and are you comfortable that your documented process will pass an audit by the DOL or IRS?

Tell us about your experience with — and expectations for — plan costs.

• If you already offer a retirement plan, do you think you're getting a good value for what you're spending?
• Do you understand the fees you're paying and how they may impact your investment return?
• How do the fees on your plan compare to the industry averages?
• Are you familiar with the DOL rules with regards to understanding the fees in your retirement plan?