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Like Don Quixote and Sancho Panza railing against the Windmills in the Spanish novel, The Ingenious Gentleman Don Quixote of La Mancha, here I am as a lonely and deranged TPA railing against Government retirement plan regulations. Caveat: if you are super busy, go on to your other work because I am just tilting at Windmills here and not expecting to teach you anything or give you any valuable ideas to implement, so I have broken the first rule of social media postings. Perhaps you will find my idea entertaining or interesting if you do decide to read on.
As a Third Party Administrator for 40 years, my life has been all about compliance, compliance and more compliance. Over the years, more and more required Notices have been forced upon the retirement plan administration industry (or more properly, upon Plan Sponsors).
We have the annual ADP test, designed, I guess, to force the Plan Sponsor to promote the 401(k) plan better with the rank-in-file employees. We have to make sure participants are given a Summary Annual Report (SAR). Please, someone (anyone!) explain to me what the SAR accomplishes in the real world! Then there is the Safe Harbor Notice, the EACA Notice, the QDIA Notice, the 404a5 Fee Disclosure Notices, etc., etc. If I was to do a complete listing, it would be too long and nobody would finish reading my blog posting.
Thinking about all of these Notices and all of the compliance work, it struck me that most everything is the Government's attempt to make employees aware of the retirement plan so that they will save for retirement. To implement and enforce all of this, the Plan Sponsors are expected to, company-by-company, develop effective communications and hold effective enrollment meetings to motivate people to engage in sufficient savings. Each financial institution doing record-keeping tries to create their own motivational enrollment books (that few participants actually read) and develop websites loaded with savings tools (that nobody uses). The Government hires many people to oversee everything (do audits, invent new notices, etc.) and that also does little or nothing to solve the dramatic savings shortfall. My years of observation tells me that all of the above efforts do not work very well! Savings rates are still abysmal.
How about a completely new, outside of the box, approach? Let's redirect some of the enforcement and audit dollars of the Government to developing a few really, really good movies or videos that can properly communicate about the wisdom of saving. Hire the best creators and movie makers from Hollywood to craft the message. Get some A-list actors and actresses to volunteer their time "for the good of America." (yea, right!)
I am betting a team of professional screen writers, combined with professional directors and actors could come up with a handful of really effective short videos or movies that could actually educate and motivate the average participant to get off their butts and start saving. Create a movie showing a saver and a non-saver later in life - you know, at retirement. One struggling to make ends meet and one enjoying life based on decisions they made about saving years ago. Instead of Plan Sponsors inventing their own education, just have them host meetings (on company time) to screen the movies or videos. Have record-keepers build prominent links to the movies on their websites. Pay NetFlix and Amazon to host the movies for free. Throw some advertising dollars into the promotion. And consider even doing some rap videos - have some rap star rail against the stupidity of not doing something for the family. You get my drift - do anything but a boring enrollment book nobody will read.
In other words, make really, really good effective, motivational movies or videos and then promote the heck out of them. Or is that just too simple of an idea? Small plan sponsor will never fork over their hard earned dollars for the superb videos already available from some for-profit companies.
Yeh! You're right - that is crazy thinking - let's just force a few more inane notices upon everyone. That will work! Right?
