Brought to you by A.Gary Katz
In conjunction with Lincoln Financial Advisors/Sagemark Consulting, a division of Lincoln Financial Advisors, a registered investment advisor
As a business owner, much time is spent on protecting yourself from certain business risks, and providing safety and benefits for your employees. One of the most popular benefits available to employees today comes in the form of a retirement plan. With the offering of retirement benefits also comes fiduciary responsibilities and potential litigation. As the fiduciary of a plan, the business owner is required to perform certain actions: invest payroll contributions in a timely manner, select appropriate investments for the plan, monitor those investments, adhere to an investment policy statement, perform employee education, review costs every 2 to 3 years, and documenting all plan processes just to name a few. What can happen if you do not meet your responsibilities? The business owner might need to restore losses to the plan.
A business owner, otherwise known as a plan sponsor, can protect themselves in a few ways. You can perform all required actions or outsource them through an independent financial advisor. A financial professional that focuses on retirement plans can guide you through the maze of protection by assisting with recordkeeping vendor selection, investment fund monitoring, and employee education as well as performing a plan review every year. Certain recordkeeping platforms can partner up with an outside advisory firm such as Ibbotson Associates to act as a 3(21) co-fiduciary of the 401(k) plan, limiting your personal liability. But be careful; there are several forms of fiduciary requirements, and many recordkeeping vendors only offer the most basic ones.
What can you do right now to protect yourself from personal liability? Contact Gary Katz, a retirement planner at Sagemark Consulting. He can perform a complimentary plan review using a fiduciary checklist to assess how vulnerable you are as a plan sponsor and fiduciary. He can make recommendations and implement strategies to help protect you from litigation unannounced Department of Labor audits. But don’t wait, over 80% of Department of Labor audits performed result in financial liability.
A. Gary Katz is a registered representative of Lincoln Financial Advisors Corp., a broker/dealer, member SIPC, and offers investment advisory service through Sagemark Consulting, a division of Lincoln Financial Advisors Corp., a registered investment advisor, Lincoln Financial Advisors, 61 S. Paramus Rd., Paramus, NJ 07652. Insurance offered through Lincoln affiliates and other fine companies. This information should not be construed as legal or tax advice. You may want to consult a tax advisor regarding this information as it relates to your personal circumstances. The content of this material was provided to you by Lincoln Financial Advisors for its representatives and their clients. CRN 201302-2076773