and other opportunities to improve contribution rates. Such
changes may help the owner contribute more to his or her
own retirement. To this end, a financial adviser may be
able to connect the plan sponsor with a local third-party
administrator; often, TPAs have extensive expertise with
implementing and administering alternative plan designs.
Other remedies may be available to the plan as well,
such as automatic enrollment and automatic escalation.
These features can have a positive impact on overall plan
participation and deferral rates, which, in some cases, may
help reduce the risk that an owner might have to return plan
contributions for himself/herself or highly compensated
PS: Why are fidelity bonds so important?
FOSTER: One of the first questions advisers should ask
business owners is if they have a fidelity bond to help
protect them against potential plan improprieties and
other issues. It’s usually a simple thing to address, but it’s
surprising how many plan sponsors fail to do so.
PS: What is The Hartford doing to help identify and
address retirement plan risks?
FOSTER: Ultimately, we’re in the business of building our
clients’ confidence in a more secure financial future; in many
cases, this begins with solving problems.
Taking this approach, we often help financial advisers to
identify plans in their area that may need help with specific
problems, or to identify up to 70 potential risks associated
with a specific plan. As I noted early on, plan sponsors often
are unaware of risks or issues associated with their plan; we
provide advisers with tools and resources to help educate
and raise awareness among plan sponsors that may lead
them to implement timely and effective remedies.
PS: What else should plan sponsors consider when
thinking of ways to boost the effectiveness of their
FOSTER: First of all, I think plan sponsors should be
applauded for offering this valuable benefit to employees.
America is getting older and millions of people are
increasingly focusing on retirement readiness. The
workplace retirement plan has become the cornerstone of
employees’ savings strategy.
For sponsors looking to keep their plan in top shape, I would
encourage them to consider working with a financial adviser;
a qualified financial professional can add significant value to a
plan and can act. I also would suggest an annual plan review,
which may be conducted with the plan’s financial adviser and/
or tax and legal counsel to ensure that, among other things,
the plan’s investment option lineup still makes sense; any
potential risks or issues identified on the Form 5500 have
been addressed; and that any other required documentation
is current. Finally, I encourage plan sponsors to talk with their
program provider to be sure they are aware of any legislative
and regulatory changes that might impact their plan; and to
ensure they understand how to optimize the plan’s services
“The Hartford” is The Hartford Financial Services Group,
Inc. and its subsidiaries, including Hartford Life Insurance
Company, Hartford Retirement Services, LLC (“HRS”), and
Hartford Securities Distribution Company, Inc. (HSD). HSD
(member FINRA and SIPC) is a registered broker/dealer
affiliate of The Hartford.
Before investing, you should carefully consider the
investment objectives, risks, charges, and expenses of
the mutual funds or The Hartford’s group variable annuity
products and funding agreements, and their underlying
funds. For fund and product prospectuses and/or a
disclosure document containing this and other information,
contact your financial professional or visit our Web site.
Read them carefully.
This information is written in connection with the promotion
or marketing of the matter(s) addressed in this material. This
information cannot be used or relied upon for the purpose of
avoiding IRS penalties. These materials are not intended to
provide tax, accounting, or legal advice. As with all matters
of a tax or legal nature, you should consult your own tax or
legal counsel for advice.
Retirement programs can be funded by group fixed or
variable annuity products and funding agreements issued
by Hartford Life Insurance Company (Simsbury, CT). Group
variable contracts are underwritten and distributed by
HSD, where applicable. HRS and HSD offer certain service
programs for retirement plans through which a sponsor or
administrator of a plan may also invest in mutual funds on
behalf of plan participants.
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