Worcester Business Journal

2 Worcester Business Journal | December 9, 2024 | wbjournal.com So, you sponsor a 401(k)? You're a fiduciary. Common misunderstandings and your fiduciary duties explained. MIKE TIVNAN, CLU ® Vice President, Financial Consultant Rockland Trust MICHAEL D. STOWE, CPA Senior Partner Stowe & Degon LLC S ponsoring a 401(k) plan seems simple – choose a provider, make the plan available to your employees, decide if you will match, and coordinate the contributions with your payroll service. Easy, right? e truth is that you, the owner running and growing your company, take on the role of a plan fiduciary. What does that mean? Sean McGarry, AIF® Vice President and Retirement Plan Services Manager at Rockland Trust's Investment Management Group (IMG), shares the key responsibilities of a plan fiduciary. "From monitoring fees, the services received for the fees paid by the company and plan participants, overseeing investments, to ensuring operational compliance and having documentation of meetings and written procedures for all aspects of the plan, it requires a team approach to make certain that the plan offered is appropriate for your employees, and that you are protected as a plan sponsor," Sean explains. "Regardless of plan size, the duties will always exist. With smaller companies, the owner oen has a significant level of involvement in the day-to-day operation of the plan. Because of their busy schedule, it can be an "if it isn't broke don't fix it approach," which may create complications down the road. In many cases, it's already broken, but the owner is not aware," says Michael Tivnan, CLU®, Vice President and Financial Consultant at Rockland Trust's IMG. "Many times, owners do not realize that the fees paid by both the company and plan participants can be significantly reduced." Reviewing your plan Reviewing your plan consistently and working with a trusted adviser will prepare you for when it's time to upgrade or make changes to your plan. You may want to consider more than just the cost of the plan itself. Comparing the services offered by your provider is important in understanding the overall value your plan may offer to your employees. Rockland Trust's IMG can review your retirement plan and help guide you through the review your of funds and expenses. "Companies should look at their retirement plans every three to five years to be sure that the plan is still the right fit", recommends Sean McGarry, AIF®. "You need to benchmark and keep track of your plan so you can see the signs if something needs to be adjusted. It's a service we offer to both current and prospective clients." Larger plans require an audit When your plan is large enough to require an annual audit, it's important to find the right partner. "As a result of their complexity, a firm with a focus on retirement plan audits will better serve and protect you as the plan sponsor," says Michael Tivnan. According to Michael Stowe, CPA and Senior Partner at Stowe & Degon, his audits with new clients reveal a pattern of common plan oversights. "e top 6 oversights we see in the plan operation are: 1. Lack of education for employees. 2. No meeting minutes recorded for plan reviews. 3. No documented process for decisions about plan changes or documentation of plan changes. 4. No process for selecting investments (Investment Policy Statement (IPS)) and no documentation of monitoring/ changing investments. 5. Fees. Many new clients aren't aware if their plan fees are higher than what the competitive market dictates. 6. Late remittances on amounts withheld from participant which must be reported and corrected. Our job is to correct these oversights so that the plan operates in compliance with the regulations." Does your retirement plan professional work in a fiduciary capacity? Working with a retirement plan professional can help make sure you're getting the best outcome for your company and employees. It is important to understand if your plan professional works in a fiduciary capacity. Brokers for example, work under a suitability standard, meaning if the product meets the needs of the end user, that product is deemed "suitable." Investment advisers typically work under a fiduciary standard of care meaning the product must not only be suitable but must also be in your best interest. e distinction seems small and nuanced, but it can have major consequences in terms of the advice you're getting on what, for many people, will amount to your largest financial asset. If you're unsure if the person helping you and your employees with your retirement plan works in a fiduciary capacity, consult your written services agreement. If you don't have one, your adviser might be operating under a suitability standard as a broker, which doesn't require a contract. Don't fall behind – contact Mike Tivnan to make sure that your plan best meets your company's needs. Mike Tivnan, CLU® Rockland Trust, Investment Management Group Vice President, Financial Consultant Michael.Tivnan@ RocklandTrust.com 508.946.8471 Michael D. Stowe, CPA Stowe & Degon LLC Senior Partner mstowe@ StoweDegon.com 508.983.6777 Not Insured by FDIC or Any Other Government Agency / Not Rockland Trust Guaranteed Not Rockland Trust Deposits or Obligations / May Lose Value S P O N S O R E D C O N T E N T

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