Buying a new car can be a harrowing experience. You have so many makes and models to choose from and there are a lot of factors that figure into your choice. Not only that, the model you may be interested in has different packages and trims to choose from. Will it be the package with the GPS or the one with cloth seats? Besides the aesthetics, there are many factors that dictate which car to pursue. Factors include money, the purpose and use of the car, as well as fuel efficiency. A family of five isn’t going to buy a Corvette and a single college student isn’t going to buy a Honda Odyssey. When it comes to buying a car, all I know is I have no say. That is why instead of a Ford Flex or a Honda Odyssey, I drive a Toyota Prius (my wife’s choice).
When a company decides that they want to put a retirement plan in place, it’s almost like trying to buy a new car. A company needs to look at several factors to determine what type of retirement plan they want to offer, as well as the goal of the plan they wish to implement. Too many plan sponsors put retirement plans in place without knowing the consequences and costs, whether it’s for liability concerns or for the company’s bottom line. The retirement plan that a company wants to put in place has to be the right fit because if it doesn’t fit correctly, the plan sponsor may either leave money on the table or risk its financial health in running it. This article shall serve as a blueprint on what plan sponsors should consider when they are deciding to implement a retirement plan.