Working Together to Improve 401(k) Plans

The only financial professional advising many 401(k) plans is a broker. Yet most brokers go to great lengths to avoid being classified as a fiduciary because of the considerable regulatory burdens and increased legal liability this status brings. Employees who don’t understand their plans should go to their HR departments and ask about getting objective advice in general education sessions or one-on-one. Though many employees might feel that their employers don’t want to hear this, they should be aware that employers need worker input to improve plan education and the plans themselves. These discussions shouldn’t be adversarial because such improvements come at no cost to employers. Typically, most or all fees are paid by employees in plans; the money comes out of their accounts. And after all, company executives often participate in the same plans.

Improvements are more likely to happen if workers and employers work together to develop better 401(k) plans supported by better education and advice. For employers, success in this regard is creating a better benefit to attract and retain better workers. For employees, it’s a more effective plan that they can use to create a better-funded retirement.

Any opinions expressed here are those of the columnists and not of ABC News.

Ted Schwartz and Jamie Cornehlsen are advisors with Capstone Investment Financial Group in Colorado Springs, Colo. Cornehlsen is also president of Dunn Warren Investment Advisors in Greenwood Village, Colo. A Certified Financial Planner®, Schwartz advises individuals and endowments. He holds a B.A. from Duke University and an M.A. from Oregon State University. He can be reached at Cornehlsen, a Chartered Financial Analyst®, advises business owners and employees on retirement plans. He holds a B.A. from the University of Colorado and an M.B.A. from the William E. Simon School of Business at the University of Rochester. He can be reached at

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