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As a 401(k) Admin, Where Do I Start?


Hey, it's Michael Sayre with CUI wealth management. So, for many people involved in their company's 401k plans, it can be a little daunting and a little nerve-wracking because, many times, you don't get formal training as to what you're supposed to be doing. It's kind of like when I was a kid; I remember going camping. I loved camping, but for a while, I didn't particularly enjoy going camping because we'd drive through these windy canyon roads, and I could see out the window. But I did not know where the road ended and where the cliff started. So, I was afraid that we would drive off the edge of the cliff.

I feel like this is similar to people involved in their company's 401k plan. They hear all these horror stories of what could happen if they do things incorrectly, but at the same time, generally, they don't have formal training. Where do you start if you have been given that responsibility? The first thing you need to do is you need to find out who your service providers are. Who is your third-party administrator or TPA, your financial advisor, your record keeper? You've got to know your contacts. Know what roles they play. Know what services they provide. That gives you a baseline of what to expect and what is taken off the table in your administration.

Second, you've got to know, internally, who are the players internally in your company involved in the 401k plan? Who is the plan administrator? Who's the plan sponsor and the trustee. You've got to know who's involved. If you have an investment committee, which is part of that investment committee? You've got to find out who has fiduciary status and who does not have fiduciary status. That's number two.

The third thing is that it's essential for those involved and who have a fiduciary status in the management of their 401k plan to understand their status. It's not enough to know who is involved, but they must know what their position is.

Finally, document it. Ensure that you have documentation of who is in charge of what, and that's where you start. That's where you find the line or the edge on the cliff. That can help you give a little bit more peace of mind, and it's a starting point. Once again, this is Michael Sayre your 401k advisor thanks

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