We understand that a redesigned 401(k) plan that replaces incumbent service providers can be disruptive for larger organizations. DCM offers a scalable, manageable solution that delivers optimal results for the plan sponsor. To achieve the desired plan design outcome, there must be a seamless flow of information 24/7 between all parties (plan sponsor, recordkeeper and TPA).
Changes in employee demographics over the course of the year can alter the expected outcome of a redesigned 401(k) plan. Traditionally, census data is communicated to the TPA only once a year; well after the end of the plan year. At that point, it’s too late to take the appropriate action to insure the plan is in compliance, and on track to deliver the anticipated results as intended after the redesign, leaving the plan sponsor frustrated and often ready to abandon the plan design altogether. Proactive management is the only option to ensure goals and objectives are achieved.
Proactive Plan Management
It has been our observation that most firms don’t propose creative, innovative plan designs because of the perceived obstacles to ongoing operation and management. Creative results can only be consistently achieved with innovative processes and procedures. Legacy firms don’t operate like this. After the end of the plan year, they issue a fail or pass report based on the ending census data. A failed test means corrective action must be taken to bring the plan in compliance with applicable IRS regulations. The steps required for solving the failure are carefully dictated by the IRS which are less than optimal for the business owner.
DCM alleviates this problem by developing a custom solution which manages the flow of information between all parties, and provides ongoing consulting and design review 24/7 in real time. With this approach, we have the information that is needed to make proactive changes that are on the terms and objectives of the business owner, not the IRS.
Contact us for a review of your plan, and a manageable solution for delivering creative results for a redesigned 401(k) plan.