IMHO: Listening Post

Some of these came from presentations, others originated from the audience, and still others arose in the dozens of side conversations at breaks and such in between the official conference sessions.  Some, honestly, are something of a synergy among the three.  See if they don’t get YOU thinking…    

You may not be responsible for the outcomes of your retirement plan designs, but someone should be. 

How you spend your weekend is a microcosm of retirement. 

“Free money” isn’t. 

Retirement income is a lot less of a problem when you have saved a pile of money. 

You can lead a horse to water, after all—but you can’t make him think. 

No one expects taxes to be lower in retirement any more. 

Auto-enrollment is still viewed as a very paternalistic type of event. 

When it comes to fee comparisons, eventually there will be better sources of information, but right now it’s still a bit mystical. 

Providing revenue-sharing information to participants is like giving car keys and whiskey to teenage boys.  

If you don’t know how much you’re paying, you can’t know if it’s reasonable. 

You want your provider to be profitable, not go out of business. 

Retirement income is a challenge to solve, not a product to build. 

If you’re having trouble connecting with an employee group, find—or create—a missionary within that group. 

When selecting plan investments, keep in mind the 80-10-10 rule: 80% of participants are not investment savvy, 10% are, and the other 10% think they know enough—and usually chase returns. 

While it’s a good idea to have fiduciary insurance in place to cover a loss, you should have a well-documented fiduciary process in place to avoid claims in the first place.   

Now is a good time to renegotiate fees. 

When advisers are examined, their plan clients usually are also. 

Never ignore a letter from the IRS. 

Left to their own devices, participants still don’t do anything.  

Tax payers effectively subsidize the benefits of 401(k)s.  Of course, they also subsidize the ability of many Americans to no longer pay federal income taxes. 

A corollary:  The tax benefits of 401(k)s are tiered toward those who actually pay taxes. 

The best way to stay out of court is to avoid situations where participants lose money.  The second best way is to have a well-documented prudent process. 

Annuitization of defined contribution balances only makes sense if those balances are big enough to annuitize. 

Some participants do opt out of automatic enrollment. 

“Free money” is still a powerful incentive for participants. 

The biggest mistake a plan fiduciary can make is not seeking the help of experts.   

You can be in favor of fee disclosure and transparency and still think that legislation telling you how to do it is misguided. 

The single most effective way for individuals to ensure that they have sufficient income in retirement is to accumulate more wealth; the amount of their savings before retirement defines their options in retirement. 

I’m often asked how we come up with our conference and magazine topics, how we manage to keep our pulse not only on what’s coming down the road, but what people are focused on in the here and now.   

The simple answer is—we listen.  And when we listen, we all learn.