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401k and Other Retirement Plans

When established and administered correctly, company retirement plans offer business owners and employees an excellent opportunity to reduce taxes and increase their retirement savings. Retirement plans can also attract and motivate employees. However, administering plans such as a 401k, profit sharing, or defined benefit plans can be complex and time consuming. Engaging the right retirement plan investment advisor can significantly reduce that burden.

The plan sponsor (the business owner) has a fiduciary responsibility to the plan’s participants. This fiduciary responsibility, among other things, includes administering the plan, selecting the investments, monitoring performance, all the while keeping expenses down. Peak Asset Management’s role is to simplify these responsibilities and help reduce the plan sponsor’s fiduciary exposure.

Our Role as a Fiduciary

To meet their responsibilities as plan sponsors, employers need to understand some basic rules, specifically the Employee Retirement Income Security Act (ERISA). ERISA sets standards of conduct for those who manage an employee benefit plan and its assets (called fiduciaries). A plan’s fiduciaries will ordinarily include the trustee, investment advisers, all individuals exercising discretion in the administration of the plan, all members of a plan’s administrative committee (if it has such a committee), and those who select committee officials. The key to determining whether an individual or an entity is a fiduciary is whether they are exercising discretion or control over the plan.

The duty to act prudently is one of a fiduciary’s central responsibilities under ERISA. It requires expertise in a variety of areas, such as investments. Lacking that expertise, a fiduciary will want to hire someone with that professional knowledge to carry out the investment and other functions.

Our Role as Plan Coordinator

Retirement plans have a lot of players (third party administrators, record keepers, custodians, boards and trustees, CPAs, legal counsel, and more) and a lot of rules.

A good investment advisor can speak enough of all languages to coordinate the administration effectively. In many cases, the advisor will set up the platform by recommending the third party administrator, record keeper, and custodian. They will make sure costs are kept to a reasonable level, and simplify the life of a plan sponsor.

Over the past few years, Congress has burdened plan sponsors with an overwhelming volume of legislation, making continual review of retirement plans essential. It is critical that the compliance and design aspects of a plan are current. In these times of change, it is important to have an advocate firm that understands the design and operational features of your company’s plan, and can help you work with your plan’s service providers to stay ahead of the ever growing regulatory burden.

Our Role as Educator to Plan Participants

A successful communication program is critical to the success of a company’s retirement plan. An effective communication program varies greatly from business to business and across industries. We review the wide variety of options available with the plan sponsor and create the most appropriate program for your particular employee population. Consistent implementation of plan education increases employee understanding and participation while raising the profile and appreciation of the benefit.