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June 2012

Feature:Build a Better 401(k)

Illustration by Jonathan Burton
Sure-fire practices to ensure that your plan is greater than the sum of its parts

Developing a successful 401(k) plan for a company is not an easy task, but according to Donald W. Barden, Atlanta regional sales director for retirement business at OneAmerica Financial Partners Inc., the leading plan sponsors are the ones who understand the importance of a well-constructed­ 401(k) plan.

These plan sponsors recognize that a 401(k) program is more than a mere financial product. “It’s a gift,” Barden says. “It’s meant to be a benefit.”

Retirement Redefined 

Retirement is a point in a person’s life that presents the luxury of deciding how to spend the day, Barden says. So, plan sponsors must have the mindset that, through a 401(k) plan, the employer is helping the employee get to that point and that luxury, he adds. “We are moving away from labeling. If you label retirement as [starting at] age 65, you are creating an environment for failure. Retirement is not a number anymore,” he says.

Instead of focusing solely on administrative details, such as fees and funds, when designing a 401(k) plan, sponsors need to study the sponsoring company: its demographics, culture and its benefits philosophy, says Howard H. Daher, of Daher Capital Group LLC.

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