6 Tips for Year-End Reviews of Retirement Plans: ING

Kaplan’s second suggestion was for advisors to obtain feedback about the plan so far. “Perception is reality,” he said. Advisors should look at the number of loans taken, contribution rules and investment options to identify dissatisfaction among the plan participants, as well as noting major changes at their clients’ firms, such as layoffs, hirings and changing demographics of participants.

An important element of any review is participant success. Kaplan recommended advisors look at how participation and contribution rates have improved to show success in the plan. These factors indicate that participant education programs are working, he said, adding, “Use data to highlight successes and address shortfalls.”

Fourth, advisors should help sponsors determine if the fees on their plans are reasonable. “Plan sponsors know it’s up to them to show fees are reasonable. They don’t have to be the cheapest, but they have to show their value,” Kaplan said. Benchmarking and providing a statement of services (because, again, sponsors don’t always know what their advisors do for them) should help in this goal. Advisors should always document why they’re making fiduciary changes.

Kaplan’s fifth suggestion was to manage participant fee disclosure. He noted that this is a work in progress, though. Following the implementation of fee disclosure rules in August, “we did not see a lot of pushback,” Kaplan said, because the mailed statements show what “might happen” when fees are charged to a plan, a reality that’s difficult for many participants to grasp. “Most organizations don’t charge fees that appear on their third-quarter statements,” Kaplan said, ”so we have yet to see admin fees” on those statements. He urged advisors to “maintain their focus on managing participant fee expectations, because they may be more concerned in January.”

Finally, advisors should document any changes made in the plan. “Ask about changes made in the past year,” Kaplan said. “Did they update the plan document? What did they tell employees?” If amendments are required, even if they’re not under advisors’ purview or the services they offer, it’s still worth mentioning to clients. “If something goes wrong,” Kaplan acknowledged, “don’t they blame everyone?”