Watch out for Biased and Paid Opinions/Studies

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I would say that if that if you ask a retirement plan expert for their opinion, 3,000 experts will yield 5,000 opinions. It’s great to be opinionated, but for the plan sponsor, it can be a bit confusing.

The problem in the industry is when opinion is masqueraded as fact in a study that a retirement plan provider has commissioned. For example, one of the largest payroll providers has just offered plan sponsors a study why it’s a great way to integrate payroll with 401(k) administration, namely hiring this payroll provider to handle 401(k) plan administration. Does one honestly believe that this payroll provider commissioned a study that’s going to say having your payroll provider handle 401(k) administration is a bad idea? Of course not, especially when my articles on the matter are available for free J

Another study was commissioned by a Chamber of Commerce that will not reveal its members that said that changing the fiduciary rule change is going to have 30% of retirement plan sponsors terminate their plan because the rule change will increase regulatory costs and liability. Nonsense. Of course, a brokers association supported the results of the study.

Opinions are important, but understand the role of the person giving it. Is it really impartial or are they really trying to steer you to a certain service or fee arrangement?

 

Topics:  401k, Benefit Plan Sponsors, Employee Benefits

Published In: Finance & Banking Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ary Rosenbaum, The Rosenbaum Law Firm P.C. | Attorney Advertising

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