What can you tell 401(k) participants during a pandemic?
During a time of uncertainty, retirement plan participants might be asking you, “should I move to more conservative investments until the crisis is over?”
We all want to answer participant questions in a way that will reduce anxiety and help employees achieve their financial goals. Handling investment questions from frightened employees is particularly tricky in times of crisis. For good reasons, most employers do not give investment advice to plan participants. Instead, most employers suggest that a participant contact a financial advisor or the plan service providers (the recordkeeper, the plan advisor, or possibly a managed account provider). Referring plan participants to your service providers can be a good choice.
Another good choice is for you to share pertinent investment education materials with concerned employees. Timely articles sensitive to our current crisis can help employees put the market decline in perspective. One investment manager recently created a piece showing the post-market performance after the SARS sell-off in 2013 and after the Zika sell-off in 2016. I’ve uploaded that article, as well as a few others that illustrate market downturns and market recovery over the long term, so please feel free to download them and to share them with your plan participants.
How is Investment Education different from Investment Advice
For HR departments that want to have a conversation with an employee about market volatility, it is important to provide education only and not to cross over into the area of investment advice. There is a distinct legal difference between education and advice. The DOL does provide guidance on what is considered education and advice (Interpretive Bulletin 96-1), and others have attempted to summarize the regulations in articles and white papers.
Market Updates
Market Insight Quarterly (Updated Quarterly)
Market Outlook (Updated Yearly)
Midyear Outlook (Updated Yearly)
CARES Act
On March 27, 2020, the U.S. House of Representatives passed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) that was passed in the U.S. Senate on March 25, 2020. The President signed the bill into law on March 27, 2020. Below are several brief summaries of provisions contained in the CARES Act that impact retirement plans and IRAs.
Resources from LPL Financial
Checklist for 404(c) and 404A-5 Compliance #1-669908
Guide for fee disclosure requirements 408(b)(2) and 404(a)(5) #1-655377
Promoting plan success checklist #1-692405
Participant resources guide 1-751827
Promoting plan success white paper #1-712521
Comparison of retirement plan types #1-798265
Taking charge of your fiduciary responsibilities #1-669893
Financial Wellness
Financial Finesse ROI
Financial Finesse Plan Sponsor Guide
Financial Finesse Life Events Research
Controlled Groups
Controlled Group Overview
Plan Audits
Sample Auditor RFP
DOL Audit Quality Report
DOL Selecting an Auditor for your Employee Benefit Plan
DOL Reporting and Disclosure for Employee Benefit Plans
AICPA Member Firms by State
AICPA Firm Preparedness Checklist in a pdf format
AICPA Firm Preparedness Checklist in a word document
Statistics from IRS on 5500 Filings
Statistics from IRS on 5500 Filings and changes over time
Waiver for Small Plans Under 100 Employees
Non-Qualified Deferred Compensation Plans
NQDC overview from Nationwide
Two-page NQDC Summary
Primary uses for Deferred Compensation
Competitive features offered through NQDC plans
Golden Handcuffs Overview
Retirement Plan Committees
Best Practices for Retirement Plan Fiduciaries by Vanguard
Committee Best Practices by Thornburg Investments
Five Retirement Plan Fiduciary Best Practices by Alger Investments
Reasons to Establish an Investment Committee
Retirement Plan Committee Best Practices by Arnerich Massena
Retirement Plan Success Guide by Vanguard
Sample Committee Charter
Plan Governance Toolkit by TIAA
Tips on Committee Member Selection by TIAA
Reports from the Department of Labor
Target Date Funds - TIPS for Retirement Plan Fiduciaries
TIPS for Selecting and Monitoring Service Providers
Understanding Retirement Plan Fees
408(b)(2) Fee Disclosure Fact Sheet
Federal Register 408(b)(2)
Why choose Black Box Pension Advocates, LLC as your retirement plan advisor?
Our focus and commitment to the employer-sponsored retirement plan space.
The combination of our fiduciary guidance and strategic plan investment consulting.
Our robust participant services, employee education and investment advice.
Plan sponsors retain Black Box Pension Advocates because we provide quality services and value. We are retirement plan specialists, we value simplicity and we are always easy to work with.