Maybe there’s no single “right way” to do anything, including running a retirement plan. But apparently there are lots of “wrong” ways – especially in a downturn.At least, that’s what Institutional Investor found, after interviewing more than a dozen money managers, record keepers, consultants, industry advocates, and other experts recently.
The questions were simple: What are the most common mistakes that plan sponsors make? And how do tough economic conditions exacerbate these missteps? The answers were varied, ranging from overreliance on mutual funds, to knee-jerk investment strategies, to not monitoring whether employees are saving enough, to ignoring the impact of loans and withdrawals.
Of course, the definition of “mistake” partly depends on who is doing the defining. Robyn Credico, a senior consultant at the Arlington, Va., office of the Towers Watson consulting firm, worries about sponsors “assuming that your vendor is taking care of everything.” On the vendor side, however, Carol Waddell, director of product development in T. Rowe Price’s retirement plan services division, says that sponsors should ....