Choosing the most effective retirement plans for your small business


For small businesses in Michigan that are searching for retirement plan providers for their employees, streamlining the process and offerings for your team is key — particularly in 2020.

For this purpose, a bundled, full-service retirement plan provider is most effective for small businesses. Instead of tracking down multiple providers to handle different components of the plan, such as investments, benefit administration, fiduciary compliance and employee education, it is more efficient to have one point of contact that is well versed with the entire plan. Bundling a plan together in this way streamlines the process of offering retirement plans to employees, and saves time for everyone involved.

Selecting a high-quality bundled service provider is not just good business it is a legal mandate for retirement plan sponsors. Access to investment expertise is critical to plan success as well as the ability of the provider to include a fund menu with a range of quality offerings. Hiring a provider who is able to assume discretionary investment management services as an ERISA 3(38) Investment Manager is of great value. This arrangement allows the provider to select and monitor the investments held in the plan.

A retirement plan provider should provide comprehensive, yet understandable, employee communication and materials that sufficiently educate employees on the basics of a retirement plan — what it is and what it can do as a necessary savings plan. This plan also should clearly communicate the offerings of each plan within a fund menu. How, and most importantly why, to enroll as well as providing clear information on investments offered in the plan is essential. Good employee educators should be alert to questions received and quickly address issues before an employee feels overwhelmed and, ultimately, takes no action.

Additionally, a professional full-service provider will consult with the sponsor of the plan. Designing the plan to correlate with the employer’s objectives and the desired outcomes is critical. In Michigan, with a high number of manufacturing and service-related jobs, attention to the needs and actions of the employees is important. These industries historically can have higher levels of turnover and it is necessary to have a retirement plan provider who will work with the employer to make sure that employees are saving for retirement (i.e., participating in the plan) and will know the right thing to do with their retirement account balance if they move on to another company in order to keep their retirement savings intact.

Having a partner with the expertise and knowledge to advise the plan sponsor of specific legislation and best practices makes their job easier. Reliance on a professional retirement plan partner and a carefully designed plan will make employees happy, increase employee retention and enhance employee recruitment as a result of offering a plan that’s digestible and readily accessible.

There are, of course, considerations for choosing a retirement plan provider that wouldn’t be the best fit for your company or its employees. A few red flags to be aware of are a retirement plan provider that is not willing to be a fiduciary of the retirement plan and an unwillingness or hesitancy to meet regularly for plan reviews. This also includes providers who are not responsive to a client’s questions or concerns, especially in times of market volatility.

At the end of the day, choosing a retirement plan provider should be at the discretion of your employees’ personal needs, and the needs of your company, as well.

Kathleen Waldron serves as vice president, assistant director of the Retirement Plan Division for Greenleaf Trust. She has more than 25 years of experience, provides leadership to the Retirement Plan Division and manages the plan recordkeeping and administration team.

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