Are you responsible for managing your company’s transition to a new employee 401(k) plan provider? Is this project filling you with dread and keeping you up at night?
Some of the health risks associated with stress include heart disease, asthma, diabetes, obesity, depression and premature death.
Does this mean that you should settle for an employee retirement plan that fails to meet your employee retention goals and risks the financial health of your company? Of course not.
For the sake of your health and the good of your company, follow these five tips for a stress-free employee 401(k) plan transition.
#1. Work With An Advisor That Supports You And Sets A Clear Timeline
Trying to manage this transition on your own or with an absentee plan advisor is a recipe for anxiety.
Some advisors simply introduce you to your plan’s record-keeper, collect their fees and leave you alone to handle the switch on your own. This leaves you with an incredible amount of uncertainty, which can elevate your stress levels.
Avoid this threat to your successful transition and your health by choosing an advisor that works with you every step of the way. Your advisor should ease your stress by setting a clear timetable for when every step of the transition will occur.
#2. Make Sure Everyone’s On The Same Page
A lot of service providers are involved in transitioning a company’s 401(k). Poor communication between these parties may cause confusion and a transition process that gets delayed.
Make sure your financial advisor establishes clear communication between all of the different service providers at the onset of your transition process. This helps avoid missed deadlines and keeps everyone on the same page.
#3. Do Your Due Diligence
You don’t want your 401(k) plan to fail.
If you’re not sure about your provider or your advisor, do some research. Talk to CFOs and HR managers from other companies that have worked with those advisors and providers. Ask them about their selection process and whether they had a good experience. If these people turn out to sound like sales representatives, that may be a red flag.
You also need to research the value of the plan you’re getting. Do your fees compare to other similarly sized plans? How do the support options and add-ons compare? Does your plan offer a robust mix of investment options to choose from? These questions help you determine if your plan offers enough value compared to its costs.
#4. Include Your Payroll Provider
Give your payroll provider advance notice that you’re transitioning your 401(k) plan. Your payroll provider needs to adjust its paperwork to send your employees’ contributions to the new plan provider. Forgetting this step could lead to delayed paychecks for your employees, and an avalanche of stress for you.
#5. Focus On Supporting Your Employees
If your employees aren’t engaged with your plan or don’t know their options, then you’re not delivering the value they need.
You need to make the process as engaging as possible. Emailed paperwork and a dry presentation aren’t likely to do the trick. Some plan advisors work to make their presentations fun and interesting for your employees, going so far as to turn the meeting into a party or even a mock game show. If you make the meeting enjoyable for your employees, they’re more likely to sign up for the plan and remember the value it offers them.
You may also want to consider working with a plan advisor that offers financial guidance and retirement planning advice to your employees. Offering financial advisory services in conjunction with your plan ensures your employees feel supported and are more likely to make the right choices in their retirement planning.
Relieve Your Stress With Help From Your Advisor
You have enough on your plate without having to blindly work your way through what can often be a major project. Working with a supportive advisor takes the hassle out of your 401(k) plan transition. This helps you preserve your health and the financial health of your company.
Protect your company’s profits and your employees’ futures. Schedule a 30-minute consultation to optimize your employee retirement plan.
