The 4th quarter of the year is a good time for financial advisors and retirement plan sponsors to review the plan's design to see if any changes might be required. Here are the key questions you should ask your retirement plan clients:

How have the demographics of the plan sponsor company changed?

If the demographics have changed, the plan will be affected.  A significant workforce reduction can result in a partial plan termination which will impact participant’s vested balances.

Should a Roth feature be added to the plan?

If the plan has not added the Roth feature, the plan sponsor should consider it now.  Diversification of tax consequences is just as important as investment diversification.  A plan sponsor may want to make this feature available so that the participants have the opportunity to decide if pre-tax or after-tax Roth savings or some combination of the two is most appropriate for their goals.

Does plan design still meet the objectives for your plan?

Finally, plan design is critical.  Are the employer contribution requirements flexible enough to allow for fluctuations in the employer’s cash flow and business cycles?  Does the plan allow for in-service withdrawals so that employees close to retirement have the flexibility to have access to investments that are most appropriate for their time horizon?  Are the owners getting the level of contribution they need to justify the cost of the plan?  Are the fees fully disclosed?

Baden Retirement Plan Services can be a resource for end-of-year plan review considerations.  As an independent third party administrator, we also provide fee transparency and credit revenue received dollar-for-dollar to help reduce the plans’ administration costs.