Should your plan advisor be involved in the required noticing process?
Absolutely.
Most retirement plans have an affiliated financial advisor responsible for supporting education and general understanding related to the plan’s benefits. This financial advisor should interact with participants and encourage them to participate in the plan because increased participant understanding of the plan’s benefits generates more trust and appreciation for the offering and increases involvement.
Noticing is a large part of this confidence-building strategy. Most participants are intimidated by the distributed notices, as they tend to be written in hard-to-understand “legalese.” A plan advisor who can explain the notice can calm any concerns related to the information. Plan advisers who reach out to participants, provide a summary of the notice’s intention and offer one-on-one or small group conversations related to these notices create an environment where participants don’t feel they have to figure it out on their own.
As the plan sponsor, you direct the plan’s financial advisor and oversee their responsibilities. If the advisor isn’t performing the expected contracted duties as the fiduciary overseer of the plan, you have the right to counsel or replace them. Therefore, you can expect the financial advisor to support the plan’s education efforts and help administer information regarding the plan’s notice distribution.
You'll improve overall plan compliance by implementing procedures that require financial advisors to support the noticing process. Additionally, the more you communicate with participants, the higher your chance of maintaining accurate contact information. Finally, financial advisors provide another touchpoint for the plan that can be documented to show diligence regarding participant involvement.
While Plan Notice can’t enforce financial advisor support for the plan, we can ensure notice distribution and receipt verification, and in many cases, we work cooperatively with the plan advisor. We’re responsible for the distribution and compliance of notices, freeing the financial advisor to perform the educational follow-up. To learn more about ways we can support this process, please contact us. When we engage with a plan, we guarantee compliance and indemnify the plan sponsor against any costs or fees that may be incurred due to improper communication and required notifications.
