Retirement Plans - synchronomics.com

it's time to retire high-fee 401(k)s

If you sponsor a retirement plan, there's a target on your back.

We don’t mean to scare you, but the government is making a push to protect American workers and their retirement savings. That means new rules and stricter enforcement. If you think you’re immune, insured, or otherwise protected, just remember: Many of the plan sponsors in the crosshairs had no idea they were breaking the rules.

Find out if your retirement plan breaks the rules

Americans worry about healthcare, and who can blame them? We spend more than $13,000 per person each year, on average.

What's wrong with retirement plans?

Plan sponsors have three primary ‘adversaries’ when it comes to penalties and fines: the Department of Labor, the IRS, and lawsuits from plan participants. IRS audits and Labor Department investigations are on the rise, and lawyers have smelled blood in the water. We’ve seen plans pay seven-figure settlements for:

The worst part? The named fiduciary on the plan—which can range from the company CEO or its head of Human Resources to a third-party advisor—may be found personally liable for plan violations. There may be more at stake than just company P&L. All is not lost, however.

The good news: Synchronomics can tell you whether your plan violates ERISA provisions and estimate your potential risk in dollars.

The better news: We can support you in various ways, from a short-term engagement that fixes your plan to a long-term takeover that saves you from any future risk.

The best news: Fixing your retirement offerings tends to pay dividends.* As annoying as regulators can be, their goal is to prioritize your employees. When you align with that goal, your employees win. Whether you're talking recruiting, retention, productivity, or the health of the economy in general: Happy employees are good businesss.

How bad is retirement plan crackdown?

Most retirement plans break at least one ERISA rule—something attorneys and legislators are increasingly aware of. All it takes is a randomly selected audit or a single disgruntled employee (or ex-employee) and you could be looking at a multi-million dollar problem. Don’t take our word for it, though. Take a look at some of the most recent headline-grabbing violations.

What the Kellogg case tells us about fees

A years-long lawsuit that’s made its way from district court to a circuit court appeal and back again highlights the risk posed by recordkeepers who go rogue. Essentially, the plaintiffs in this case allege that Kellogg failed to adequetely monitor the recordkeeper for its retirement plan, which led to excessive fees that were passed on to plan participants… to the tune of $7 million dollars. Most of the court decisions to date have revolved around litigation versus arbitration and other logistical questions, but the oingoing case offers a very real cautionary tale to plan sponsors who can’t justify their fees in detail.

Do alts carry hidden risk for sponsors?

Investors are increasingly interested in alternative investment options as a way to manage risk. For plan sponsors, however, adding alts to their menu of offerings can create regulatory risk, rather than mitigate it.

Can you be sued if the market tanks?

Technically, ERISA includes language protecting participants from underperformance—in other words, if the investments in your plan underperform a benchmark for the broader market. In reality, these types of cases are hard to prove.

The Synchronomics Difference

Most of the companies that offer to revamp your benefits package either outsource the job to a company like ours… or are trying to sell you something with commissions and fine print attached. Synchronomics is on your side. We’re the only 402(a) fiduciary that’s dual registered to help plan sponsors manage their healthcare benefits and retirement plan offerings.