Employers strongly are opposed to state-run retirement plans for private companies, such as those proposed in California and Massachusetts, according to a new report by the Retirement Advisor Council.
Respondents cite concerns over the lack of transparency, customization, paticipant trust and adviser involvement as well as the chance of assets being siphoned for other purposes. Plan sponsors also may not be as worried as they should over the possibilty of federal roll-backs of maximum contributions to 401(k) plans formulated in Internal Revenue Code section 402(g), the report finds. While many respondents anticipate regular increases to help prepare participants for retirements, they would be surprised by rollback contribution limits.
Instead, the Retirement Advisor Council backs the Protect My Piggy – Save My 401(k) initiative by the National Association of Plan Advisors, an industry organization representing advisers and policymakers. NAPA is encouraging retirement plan participants to stop Congress from reducing maximum 401(k) plan contributions.
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The report also finds that respondents commit much time to fiduciary duties and use professional retirement plan advisers in an effort to stay up to date on legislative and regulatory developments. Respondents report being worried about their inability to influence the government or the direction of financial markets strengthens the demand for professional retirement plan advisers.
"In the pursuit of successful participant outcomes, employers rely on their Retirement Plan Advisors to keep them abreast of legislative and regulatory issues," says Steve Dimitriou, AIF, AAMS, PRP, managing partner of Mayflower Advisors. "In 2013, plan advisers will monitor and provide guidance on a number of issues that impact their plan sponsor clients and participants. These will range from the budget-related discussion of contribution limits to the definition of fiduciary to the potential formation of state-run retirement plan alternatives for the private sector."
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