It’s time for some spring cleaning and not just for your house; like cobwebs in the attic, retirement plans need to be cleaned out too.
Plan participation is at an unprecedented high due to increased automatic enrollment programs. However, the average employee only stays with the same company for a few years; this is especially true with younger workers. This rapid employee turnover, in addition to increased plan participation, can lead to an abundance of ‘left behind’ accounts. If left unchecked, these accounts will stay with the plan until the participant has reached retirement age.
Since most plan fees are calculated on a per account basis, having smaller accounts can increase plan administration costs and leave plan sponsors vulnerable to greater fiduciary responsibility. Luckily, plan sponsors can update their plan design and add an automatic rollover provision to offer an easy way to remove small accounts; reducing cost and ensuring limited fiduciary liability. Talk to your plan consultant today to see how you can clean out the ‘cobwebs’ from your retirement plan.