The Present State of the 401-K

A few new findings that you should know: 

Audit Programs:

A 401k audit is most likely going to become part of your future this year.  A recent United States Supreme Court ruling has paved the way for retirement plan participants to sue the sponsors of retirement plans for losses incurred if any fiduciary misconduct or mismanagement can be shown.  In order for companies to protect themselves from such litigation, a 401K audit  is going to have to be carried out, and the estimated cost of such audits are running about $15,000.  This is a considerable expense, but the risk of a lawsuit could be so much greater.  Can you afford that risk???

The best way to avoid exposure is to discuss with CBR the advantage of shifting the risk and liability for your 401K over to CBR and completely removing yourself from the risk of getting sued.  How is this possible? It is possible through the Multiple Employer Plan, or MEP.  The MEP allows many employers to have their own plan, administered by CBR without the risks.  The CBR MEP has features that protect our client companies from traditional fiduciary and plan trustee liabilities.  If your current 401(K) plan is out of compliance, employees are able to pierce the corporate veil and go after the personal assets of the plan sponsor-usually the business owner. 

I also saw this recent survey from BLR.com:

"A survey of compensation and HR professionals indicates that 80% of employers have maintained their matching contributions to employee 401(k) plans throughout the recession. What’s more, of the organizations that suspended their match, half say they will consider reinstating it this year. "

Posted February 8th, 2010 by Jessica Spinks - Posted in 2009 Money-Saving Strategies, Wages | |

3 Responses to ' The Present State of the 401-K '

Subscribe to comments with RSS or TrackBack to ' The Present State of the 401-K '.

1. Kristian Svindland said,
   
   

   on February 8th, 2010 at 2:07 pm

   Another reason for small businesses to consider PEO to handle all HR functions.

2. Jessica Spinks said,
   
   

   on February 12th, 2010 at 12:48 pm

   Thanks Kristian! Do you read our blog often? Do you work for a PEO?

3. Kristian Svindland said,
   
   

   on February 23rd, 2010 at 12:56 pm

   Hi Jessica,

   I have recently been following your blog. I like what you have done so far. Keep up the good work. HROplus is not a PEO, but a consultant to small businesses exploring their options for HR outsourcing. Depending on the size, industry, geography and expected benefits, we make recommendations on various models, including PEO.

Leave a reply