401(k) plan sponsors who aren’t worried should be -- Carosa
Nobody expects the unexpected, yet, ironically, that’s exactly what should be expected.
On the evening of September 22, 1970, mankind would be forever changed. At 10:55 pm, the BBC began airing the second episode of the second season of a surreal sketch comedy that to this day cannot be distinctly described.
It was in the first skit following the opening when a mill worker approaches a woman quietly knitting as she sat comfortably on a couch. “One of the cross beams has gone out askew on the treadle,” he tells her.
The woman expresses confusion and repeatedly asks the mill worker to explain himself. Increasingly frustrated, he finally bursts out, “I didn’t expect a kind of Spanish Inquisition!”
To the sudden sound of ominous musing, in burst three men clad in red medieval vestments. The leader among them steps forward with the iconic pronouncement: “NOOO-body expects the Spanish Inquisition!”
Thus comes the lesson from Monty Python’s Flying Circus and its Spanish Inquisition sketches that all 401(k) plan sponsors must heed as they address the highest current concern.
Think about this for a moment. Trade journal headlines are replete with suggestions, current topics and perilous warnings for 401(k) plan sponsors. But these missives, once amassed, amount to nothing more than preparing for the last battle.
The world–whether it be competitors, customers, or compliance cops–consistently speeds always one step ahead of you. What matters isn’t how you solved the problems of the past, but how you successfully anticipate (and thwart) the problems of tomorrow.
I’d give you a few examples, but, then, they wouldn’t be examples, would they?
You can research all you want about the known universe of data regarding the retirement plan environment, but it will always be the one stone left unturned that will ultimately do you in.
How do you combat an enemy you cannot see? By changing your frame of reference.
Everything, even something normally invisible, casts a shadow when viewed from the right angle.
So, how do you reposition yourself to catch that correct perspective? Well, it’s near impossible to know since our quarry is so elusive. It’s like asking, “How do I find something I’m not certain I’m searching for?”
To answer this, we need to borrow a phrase from subatomic particle physics. It’s called “cross section.” It refers not to a physical area (like the length and width of “area”), but is rather a function of both time and space. Think of it as a car moving along a highway. Its cross section is the space it occupies not in a single instant, but over the duration of several instances.
Imagine taking a picture of that moving car and keeping the lens open for a few seconds. When you expose the film, you don’t see a clean crisp image of a single car. Instead you see the blurry smudge of the car stretched across the highway. It’s this smudge that physicists call the “cross section.”
The practical implication of the term is this: A sedentary object has a smaller cross section than if that same object were in motion. The size of the cross section is important. The bigger the cross section, the more likely the object will interact with another object.
Going back to expecting the 401(k) unexpected, plan sponsors with a bigger cross section will be more likely to identify the unexpected before it surprises them. What kind of motion will make their cross section larger?
Here, the answer is quite simple, and yet quite hard. The simple part is knowing what to do: keeping abreast of the latest trends in the retirement plan industry, reading trade journals like BenefitsPro or FiduciaryNews.com.
But don’t just read the headlines. Connect the dots of those headlines.
The hard part is having the time to do that, but if plan sponsors can stay in motion this way, they may be in the position to avoid being surprised by the unexpected. Indeed, they’ll be able to turn the tables and surprise the unexpected.
In fact, you might say they would be poised to pop in, clad in red vestment, loudly declaring, ““NOOO-body expects the Spanish Inquisition!”
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