Eight 401(k) Commandments

If your company administers a 401(k), or you provide advice to clients who have retirement plans, then listen up! Here are eight commandments you should follow if you are knee-deep in the 401(k) swamp.

1. Offer plan participants the option of changing their accounts on a daily basis through an 800 number or the Internet.

2. Don't offer too many investment options.

3. Offer investment advice only if it's independent.

4. Fully document any change in investment advisers.

5. Craft a carefully worded strategic investment strategy explaining the plan's objectives, and distribute it to participants.

6. Avoid doubletalk, such as policy statements that don't include esoteric or language that is not easily understood.

7. Get an ERISA compliance audit by an attorney or consultant who specializes in the law.

8. Select a group of employees, including plan participants, to be the plan's fiduciaries.

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