By Jay E. Pluimer on August 3, 2016
My family is getting excited about the upcoming Summer Olympics in Rio. I have a 10-year-old daughter who is a year-round competitive swimmer and shares what’s likely a common dream among young athletes to compete on the world stage. A wonderful thing about sports like swimming is that the time standards for Olympic qualification are clearly stated and communicated so every aspiring Olympian knows what it takes to swim for their home country.
Although the standards for 401(k) plans aren’t as clearly stated as the times required to swim at the national or Olympic level, it is very important to periodically benchmark your 401(k) plan. Fiduciary standards for business owners and plan sponsors have a number of requirements that need to be met, and the most effective way to ensure your plan is meeting those standards is to go through the benchmarking process.
In fact, many of the lawsuits against 401(k) plans (large and small) over the last few years have involved the failure of plan sponsors to regularly conduct plan reviews to ensure they are meeting industry standards. A key consideration supporting the benchmarking process is that your current 401(k) solution may have been an excellent choice a few years ago, but it is important to verify that the investment share classes and internal expenses are keeping pace with the growth of your plan.