PLANSPONSOR - October 2017 - 22

The role of the plan sponsor
in participant account preservation
M
ost employers prefer to see departing employees roll their money
out of the plan, it seems. Asked for their philosophy concerning
plan assets of departed participants, just 33.6% of retirement
plan sponsors said their organization would rather that terminated employees
with material balances remain in their plan, according to the 2016
PLANSPONSOR Defined Contribution (DC) Survey. This attitude could be
changing, however, due to several recent developments and plan sponsors'
growing understanding of their rollover-related responsibilities.
Employers Re-evaluate Their Philosophy
According to " 2017 Hot Topics in Retirement and Financial Well-Being " from
benefits outsourcer Alight Solutions (formerly Aon Hewitt), when sponsors
were surveyed about their satisfaction with their position on retaining assets
in their plan after employees retire or terminate, 31% said they are currently
satisfied. Of the rest, 15% said they are very likely to review their position this
year, and 34% said they are moderately likely to address it.
" If a sponsor is thinking, 'We need to have really low-cost fees and the
best share classes available,' those share classes are available to plans with
more assets, " says Rob Austin, director of research at Alight, in Charlotte,
North Carolina. " But clearly there are diminishing returns: If you are a really
big plan, retaining those assets isn't going to help your purchasing power
that much. "
When departed employees leave their money in a plan, the sponsor may
be wary of the time and expense involved in continuing to deal with those
participants, Austin says. " There are some plan charges that are on a headcount
basis, such as recordkeeping fees. So the more people in the plan, the
more cost, " he says. " And there is definitely a time component: Think of all
the communications you have to make sure go to all participants. Also, if
participants move, you have to try to track their address changes and make a
good-faith effort to locate them. "
With the new fiduciary rules from the Department of Labor (DOL)
looming (see " The New Fiduciary Rules' Impact, " page 29), expect more
employers to review their philosophy on rollovers-and how their recordkeeper
handles them.
22 PLANSPONSOR.com October 2017 Art by Victo Ngai
MONEY
Moving

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PLANSPONSOR - October 2017

Table of Contents for the Digital Edition of PLANSPONSOR - October 2017

Moving Money
403(b) / 457 Buyer's Guide
Best Practices for the IPS
The Middle Ground
Questions, Answered
Navigating RMDs
PLANSPONSOR - October 2017 - Cover1
PLANSPONSOR - October 2017 - Cover2
PLANSPONSOR - October 2017 - 1
PLANSPONSOR - October 2017 - 2
PLANSPONSOR - October 2017 - 3
PLANSPONSOR - October 2017 - 4
PLANSPONSOR - October 2017 - 5
PLANSPONSOR - October 2017 - 6
PLANSPONSOR - October 2017 - 7
PLANSPONSOR - October 2017 - 8
PLANSPONSOR - October 2017 - 9
PLANSPONSOR - October 2017 - 10
PLANSPONSOR - October 2017 - 11
PLANSPONSOR - October 2017 - 12
PLANSPONSOR - October 2017 - 13
PLANSPONSOR - October 2017 - 14
PLANSPONSOR - October 2017 - 15
PLANSPONSOR - October 2017 - 16
PLANSPONSOR - October 2017 - 17
PLANSPONSOR - October 2017 - 18
PLANSPONSOR - October 2017 - 19
PLANSPONSOR - October 2017 - 20
PLANSPONSOR - October 2017 - 21
PLANSPONSOR - October 2017 - Moving Money
PLANSPONSOR - October 2017 - 23
PLANSPONSOR - October 2017 - 24
PLANSPONSOR - October 2017 - 25
PLANSPONSOR - October 2017 - 26
PLANSPONSOR - October 2017 - 27
PLANSPONSOR - October 2017 - 28
PLANSPONSOR - October 2017 - 29
PLANSPONSOR - October 2017 - 403(b) / 457 Buyer's Guide
PLANSPONSOR - October 2017 - 31
PLANSPONSOR - October 2017 - 32
PLANSPONSOR - October 2017 - 33
PLANSPONSOR - October 2017 - 34
PLANSPONSOR - October 2017 - 35
PLANSPONSOR - October 2017 - 36
PLANSPONSOR - October 2017 - 37
PLANSPONSOR - October 2017 - Best Practices for the IPS
PLANSPONSOR - October 2017 - 39
PLANSPONSOR - October 2017 - The Middle Ground
PLANSPONSOR - October 2017 - 41
PLANSPONSOR - October 2017 - Questions, Answered
PLANSPONSOR - October 2017 - 43
PLANSPONSOR - October 2017 - Navigating RMDs
PLANSPONSOR - October 2017 - 45
PLANSPONSOR - October 2017 - 46
PLANSPONSOR - October 2017 - 47
PLANSPONSOR - October 2017 - 48
PLANSPONSOR - October 2017 - Cover3
PLANSPONSOR - October 2017 - Cover4
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