Perspective: Solutions Define Success in the Retirement Plans Market

The dictionary defines the word, “solution” as the “answer to or disposition of a problem.”

Not coincidentally, the definition also happens to be the meaning of success in the retirement plans market.

There are literally hundreds of thousands of employers that sponsor retirement plans in the United States and together they oversee trillions of dollars of retirement savings. Yet, many of those plans are not meeting their objectives and desperately need help from a knowledgeable financial adviser to find solutions to their problems.

Consider that nearly three of every five non-safe harbor plans failed their 401(k) non-discrimination test in 2008, according to data available from the 401(k) Profit Sharing Council of America (PSCA). The failure rate was 20% higher than the previous year, the PSCA reported.

Many local employers that sponsor retirement plans may have failed their nondiscrimination test as well. Or they may have other issues that warrant attention from a financial professional. With a little knowledge and some ingenuity, financial advisers can determine which retirement plan sponsors need their help and reach out to them. It is opportunity spelled with a capital “O” because anyone who has served this market over time can tell you that success starts and ends with the words, “solving problems.”

These opportunities start with publicly available information on the World Wide Web. Information about local retirement plans can be harvested through a variety of websites such as,, or, in some instances, through a retirement plan provider.

All these web sites offer a variety of information. However, the common thread that can lead to the expansion of a retirement plan practice start with information that 401(k) plan sponsors must file with the U.S. Department of Labor on Form 5500. Form 5500 contains data on a wide number of retirement plan attributes, including employee contributions, participation levels and how assets within the plan are invested.

Used properly, Form 5500 can potentially help advisers target scores of local businesses that need help solving problems with their retirement plans. With this data in hand, advisers can pinpoint plan sponsors that lack an advanced plan design, fail to comply with fiduciary obligations, have inadequate fidelity bond protection, make corrective distributions, need to increase participation rates and other issues.  Because employers are now required to file Form 5500 electronically, this information is now available online sooner than ever.

Solving these problems can place advisers in the company of business owners who not only need help making their retirement plans run more effectively but who have personal financial needs as well. Fixing problems with their retirement plans can go a long way towards establishing an adviser’s credibility for helping with other financial needs.

But advisers don’t have to be highly experienced with retirement plans to become a problem-solver. In most cases, solutions for retirement plan problems are available by calling on the regional sales director representing a retirement plan provider. A competent, experienced RSD can assist with everything from analyzing needs to generating plan proposals and from recommended advanced plan designs to educating plan participants.

Becoming a problem-solver will ultimately lead you to a new definition of success in the retirement plan market. The path starts with your neighborhood business owners who more than ever need your help in ensuring their retirement plans achieve their goals.

E. Thomas Foster Jr., Esq., is The Hartford’s national spokesperson for qualified retirement plans. Foster works directly with broker/dealer firms and advisers to help them build their qualified retirement plan business and educate them about industry issues.

This information is written in connection with the promotion or marketing of the matter(s) addressed in this material. This information cannot be used or relied upon for the purpose of avoiding IRS penalties. This material is not intended to provide tax, accounting or legal advice. As with all matters of a tax or legal nature, you should consult your own tax or legal counsel for advice.

The Web sites referenced in this piece are not maintained by The Hartford.