Kerberrose

Self-Directed Brokerage Accounts? To Add to Your Plan or Not: That is the Question

Participants may be attracted to self-directed brokerage accounts (SDBAs) because of the seemingly infinite choice of investment options. While it’s tempting to please these often-vocal employees, much consideration should be given when contemplating an SDBA option for your qualified retirement plan. There are several fiduciary issues your committee should discuss, decide, and document.

Beneficiary of Unintended Consequences

Not changing the designation when appropriate may, at the least, subject your intended beneficiaries to the inconvenience and distress of the probate process and likely delay distribution of assets. Identifying and updating participants’ beneficiaries for 401(k) plan assets can ensure a smooth transition of 401(k) assets to the people who need them in their absence.

Three Ways to Strengthen Your Retirement Plan Committee

Retirement plan committees aren’t required by ERISA; however, they can be extremely beneficial nonetheless — especially for larger plans. They can even help in the event a sponsor is sued, as long as the committees are constructed and operated appropriately. Depending on the size of the plan, some organizations split up committee responsibilities into investment oversight, administration, and settlor functions.

Measuring Financial Wellness

Establishing financial wellness metrics has become increasingly important over the last year. The COVID-19 pandemic has created economic hardships for many American families, depleting emergency funds for some and forcing others to take on additional debt to cover necessary expenses. At work, the resulting stress can lead to increased absenteeism, decreased productivity and greater health care costs for plan sponsors.

The Explosion of Bitcoin

From Wall Street Journal articles and editorials in Barron’s, to Facebook posts and holiday dinner conversations, Bitcoin is everywhere. This is not surprising when you consider Bitcoin’s exponential growth in 2017. In a year where the market saw new highs, one of the top-performing mutual funds returned 105.73 percent¹, and a top performing stock in the S&P 500 saw 132.3 percent growth (NGR)², Bitcoin’s growth made these all pale in comparison.

To Bundle or Not to Bundle? — What’s Best for Your Business Is the Question

Whether to use bundled or unbundled service providers is an important decision for your retirement plan. A fully bundled arrangement provides an easy, “one-stop shop” for services, while unbundling separates functions and uses a third-party administrator (TPA), distinct from the recordkeeper. While there is no right or wrong answer to this question, weighing the advantages of each option against the needs of the organization is essential.