The Best of the Best
It is with great pleasure that we feature the 2019 PLANSPONSOR Retirement Plan Adviser of the Year winners and finalists as the cover story for this issue. Plan advisers continue to raise the bar each year, in terms of the standards they hold themselves up to when working with their clients and the results they achieve for the participants they so dutifully serve. Q&As with this year’s champions give insight into how they have distinguished themselves.
In “Coaching the Committee,” we alert readers to a new development that could have significant consequences for clients. In their audits, the Department of Labor (DOL) and IRS are paying close attention to fiduciary training of retirement plan committees. According to one Employee Retirement Income Security Act (ERISA) attorney, the DOL is particularly interested in whether the committee has been given training in the past year. This article discusses what key information committee members need to learn—e.g., the basics of ERISA, the details of their fiduciary duties, what is involved in a prudent process, and how to assess and monitor investments, plan fees and vendors.
An interview with a managing underwriter at Golsan Scruggs, “Buyer Beware!”, warns advisers that there is no standard coverage among errors and omissions policies. The Insurance Services Office has not issued federal standards for E&O policies for registered investment advisers (RIAs). Additionally, some insurers are “admitted” by state regulators, meaning they must comply with the regulator, while others are “non-admitted,” enabling them to write their policies as they choose.
Most of plan advisers’ time is devoted to plan design, benchmarking the plan and improving participants’ outcomes. However, advisers would be remiss with respect to outcomes if they didn’t consider the challenges that all of their participants, including highly compensated employees (HCEs), face. Obviously, an individual making $250,000 or more will not save enough for retirement by maxing out his contributions to a 401(k).
“When Savers Exceed the Limits” explores a variety of ways that HCEs can save more in order to retire with an adequate nest egg. Experts say that advisers should first help HCEs maximize their savings from qualified plans—such as employer profit-sharing plans, cross-tested plans and cash balance plans—because assets in these may not be claimed by creditors. Next, they recommend nonqualified deferred compensation (NQDC) plans, which have no limit on the amount a participant may defer. Finally, they point to a variety of stock rights, including stock options, restricted stock, stock appreciation rights, phantom stock and employee stock purchase plans.
Given the volatility in the markets in the past few months, particularly in the fourth quarter of last year, “The Role of Alternatives” is a timely feature that reveals how some target-date funds (TDFs) are beginning to put money in alternative investments. One alternative that appears quite popular is real estate, either invested in directly or through a real estate investment trust (REIT).
We always welcome your feedback and suggestions for coverage you would like to see in the magazine.