Before meeting with your adviser, plan sponsors should know what to anticipate in an annual review and take steps to complete the following list of responsibilities in order to ensure a successful plan year. Take a look at our fast five on what to achieve in your 401(k) Annual Review:
1. Review what did and did not work in your plan during the prior year. The annual review is not just an advisory meeting. You should expect a more comprehensive review of your investment performance and be ready to make necessary adjustments if needed.
2. Anticipate changing financial environments and mirror these in your plan. While you will want to look at the past year to review plan design and performance, you may also want to think ahead to the coming year. Keep in mind changes in the marketplace or your company dynamics that could affect financial investment plan options for the future, then make changes accordingly.
3. Communicate plan changes to employees. While implementing these changes in your new plan is important, informing your employees of changes and any effective dates is perhaps just as pressing of a matter.
4. Discuss fee arrangements. Though reviewing and negotiating fees is never an easy topic to include in your annual review, it is a necessary one. If your 401(k) investment adviser is not initiating the conversation surrounding your provider fees, you should do so.
5. Confirm that your plan is in compliance with the Investment Policy Statement (IPS). Though your plan should already be in compliance, yearly review of these standards should be commonplace to ensure that any changes in the plan and related investment holdings are in accordance with the IPS.
If you have any questions regarding your 401(k) Annual Review, feel free to contact our Certified Employee Benefit Specialist, Linda Lauer at firstname.lastname@example.org or 901.685.5595.