Josh & Jay welcome Chris Roper, Plan Success Consultant with Qualified Plan Advisors and Chris Bouffard, Managing Director of Wealth Management for Prime Capital Investment Advisors to the Deep Fried studios for Chapter 4 of our Retirement Planning and Education (REAP) Series, a 4 part series discussing important topics that business owners should know about with their employee retirement plan offerings.
In this episode, the guys discuss the evolution of retirement plans, with defined benefit plans giving way to defined contribution plans over the previous decades, and how current trends are demanding even more attention paid to 401(k) plan participants thru financial wellness programs. From fee compression to increased litigation to more educated plan participants, the days of “set it and forget it” are over. Take a listen to what you as a business owner need to know about your 401(k) plan!
- There has been an evolution in 401(k) financial educational needs based on age and demographics, with many plan participants needing education on financial principles that were not taught in high school or college.
- Retirement plans experienced a monumental shift from the days of the company taking care of it’s employees' retirement needs, both in the accumulation phase and distributions in retirement, to current day where many plans are self directed and require the plan participant to make investment and withdrawal decisions on their own.
- Defined benefit retirement plans are where the distribution amount is known, or “defined”, such as with an income annuity. Pensions are defined benefit plans.
- Defined contribution is where the amount inputted into the plan is known, but the eventual outcome is determined by several factors, such as investment performance, retirement age, amount of withdrawals, etc. A 401(k) plan is a defined contribution plan.
- Plan participants have traditionally focused on “retirement readiness”, that is do they have enough money accumulated to retire. This mindset has shifted over the past few years to “retirement wellness”, which is about opening the minds of business owners on why they should should care about the financial wellness of their employees and how it relates to productivity.
- One of the most important questions to answer is how do we as advisors and plan sponsors go about reducing the financial stress of plan participants, especially during these troubling times.
- Financial Fitness for Life (FF4L) is a program offered by Gulf Coast Financial Advisors thru our association with Qualified Plan Advisors that combines technology and in-person education to develop a wellness plan specific to an employee group. FF4L uses educators to meet with employees to provide personal service supplemented by technology to maximize the impact of a 401k plan. Results are measurable and employees are given the tools to manage their situation, showing that the business owner cares about their employees and resulting in increased employee buy-in with long lasting effects.
Gulf Coast Financial Advisors
Prime Capital Investment Advisors
Qualified Plan Advisors
Financial Fitness for Life