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An Employer’s Guide: The Tributaries of a Successful Retirement Plan



Creating a strong retirement plan for your employees can be related to the three rivers here in Pittsburgh. Separate, the Allegheny and Monongahela are two independent tributaries, but combined they create a confluence, the Ohio River, and form a singular and stronger current.

Your Plan Participants and your Employees, benefit from the seamless integration of the separate components of the retirement plan, merging them into a cornerstone of Retirement. This is a process that forms the foundation for a superior retirement plan. At the same time, it addresses your fiduciary responsibility to the Employee and the Department of Labor (DOL).

The Retirement Plan Appreciated by Both the Employer and Employees

As a Business Owner, and Plan Fiduciary, you drive the company’s retirement plan and thus create the opportunity for an Employee to build their own Retirement. The Plan, its Menu of Investment Options, but most of all, the Education and Assistance accompanying the Plan will result in being able to build a more meaningful Retirement Asset.

While a successful company retirement plan, as measured by participation and satisfaction, involves many moving parts, our experience is that the Plan can revolve around a simple design. After all, the Plan must be understood to be appreciated by those using it!

State of the Art Plan Design Options include:

o Auto-escalation

o Auto-enrollment

o Employer match contributions

o Loan flexibility

o Reasonable eligibility standards

o Roth option

o Profit Sharing design flexibility to meet certain Objectives

Every company is unique; together, we will customize the most effective design with you based on your Objectives and in light of your other Employee Benefits.

Tributary: Plan Participation

As we know in Western Pennsylvania, in some years, the rivers run shallow; and in some years, they overflow.

But the fish keep swimming.

That is a fair analogy with creating one’s future retirement asset. When an Employee contributes to a robust retirement plan that’s reasonable in cost and comes with access to objective advice, they feel confident in knowing that they have a level of control over their ultimate retirement.

And that idea is incredibly powerful. So powerful that it helps increase employee retention and productivity – things that are at the core of every successful company. (WSJ)

How Can Employers Help Employees Save for a Meaningful Retirement?

In a recent Fidelity Investments study and CNN article How to be a 401(k) Millionaire, researchers and reporters identified three trends that investors with over a $1 million in 401(k) savings had in common, including:

1. They started young.

2. They always took advantage of the company match.

3. They saved a median of 14% of pay each year (not including the company match).

In addition to this, the Pittsburgh Post-Gazette says that retirees "will need about 70 percent to 80 percent of their pre-retirement income to maintain their standard of living when they retire."

With the decline of the Defined Benefit pension plans, it is vital that Employees have the ability to build their own Retirement through a Plan offered by their Employer.

If you wonder why Plan participation is not higher and why the average deferral amount appears to be low, let’s discuss methods for reengaging your Employees and instilling enthusiasm for the Benefit that you provide. The bedrock of high Plan Participation, and enthusiasm is easy access to knowledgeable Plan Advisors.

Your Employees may find that a daytime discussion with us is difficult with their daily schedule; or they may want to have a Significant Other participate in the discussion. In addition to regular business hours, we, at Stratos Wealth Partners, offer Saturday and extended evening hours to dovetail with your Employee’s personal schedule.

Tributary: The Partnerships Connected to Your Plan

Business Owners understand the synergy of partnerships. Retirement Plans combine the talents of three entities:

1. A Team of Experienced Financial Advisor Co-Fiduciaries

2. Third Party Administrator (TPA)

3. State of the Art plan provider

Each of these professionals brings a unique skill set to help navigate through the turbulent waters of ERISA, DOL, SEC, and other Fiduciary Regulation swirling around the Retirement Plan.

One major way these specialists can add value is by implementing the recently enacted 408(b)2 regulation through a Co-Fiduciary relationship between the Plan Trustee and the Financial Advisor Team.

This regulation, created in July of 2012 by the U.S. Department of Labor (DOL), required plan sponsors to assess retirement plan fees to determine fee reasonableness. Overwhelmed by their former multiple layers of plan fees and expense, Plan Trustees seek simplification and transparency from 401(k) Specialists, such as Stratos Wealth Partners. To start the conversation, we demystify the existing complexities and benchmark your plan costs to be sure that the Plan is competitive and cost effective.

The role of the Financial Advisor Team as a Co-Fiduciary assists further with the "workload" thrust upon the Business Owner and Trustee.

With today’s frequent audits, it is critical that plan sponsors and fiduciaries have a well-documented process. Plan sponsors have a legal responsibility to act prudently and solely in the interest of the plan's participants in the selection, evaluation, and monitoring of investment decisions. This Process is developed and maintained by your Co-Fiduciary, Stratos Wealth Partners.

Confluence: The Goals of a Powerful Retirement Plan

We have asked Plan Sponsors, what are the goals of a retirement plan? At Stratos Wealth Partners, we believe one major goal is to assist more hard working people save for their comfortable and dignified retirement. But, another major goal should be to foster an appreciation on the part of the Employee for the time, effort, and money put forth by their Employer in creating and maintaining their 401(k) Plan.

Thoughtful plan design, ongoing Employee Education assistance, and Co-Fiduciary due diligence can help accomplish those goals!

To learn more about creating a company retirement plan that benefits your business and your employees, please contact Grant or Harry Butson at Stratos Wealth Partners today.


Securities and Retirement Plan Consulting Program advisory services offered through LPL Financial, a Registered Investment Advisor, member FINRA/SIPC. Other advisory services offered through Stratos Wealth Partners, Ltd., a registered investment advisor and separate entity from LPL Financial.

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