Three (3) Steps To Take Regarding Your 403(b), 403(b)(7), 403(b)(9), 401(k) or 457 Retirement Plan

Three (3) Steps To Take Regarding Your 403(b), 403(b)(7), 403(b)(9), 401(k) or 457 Retirement PlanThere are many non-profit organizations, ministries, churches, and mission sending organizations that wonder whether they are "doing" the right thing with their retirement plan.

 

They not only wonder if they are doing the right thing, they are also fearful of doing the wrong thing, and sometimes of doing anything at all.

When ministry leaders call Envoy they sometimes have specific questions about costs, fees, or investments. But more often than not they call because they have a people problem. For example, they may have an employee who has been with them for 30+ years. The employee wants to retire but no plan was put in place to address this inevitable issue. The employee, staff member, Senior Pastor or Executive Director approaches a Board member with the facts that show they should retire based on age and situation, but the soon-to-be retired employee’s finances tell a totally different story. It is at this point they reach out to us, the retirement plan experts, and ask, "What can we do?"

After more than 3 decades exploring the inner workings of 403(b), 403(b)(7), 403(b)(9), 401(k) and 457 retirement plans, I've decided that every Plan Sponsor, every Retirement Plan Oversight Committee member, every President, COO, or Executive Director who cares about training and helping their staff should do the following 3 things.

Three (3) Steps To Take Regarding Your 403(b), 403(b)(7), 403(b)(9), 401(k) or 457 Retirement Plan

1. Understand what is true about your retirement plan

How is your plan constructed? Designed? Administered? Managed? How is it really being used by your staff? If there is no plan in place at all, the reality is immediately obvious.
John 8:23 says that “Knowing the truth will set us free.” Freedom and life giving impact certainly starts with knowing the truth. It if further suggested that with Jesus’ help we can find our way to the total freedom promised by him during his earthly ministry. He sent his wisdom and insight to guide us. The reality that freedom truly can exist becomes real. Know the truth about your retirement plan.

2. Measure your plan against 3 relevant yardsticks.

What might those be? There are a number of different metrics that are relevant.

A. Does your plan connect your staff to God's perspective of retirement?
If there are no values or faith-based perspective in your retirement plan and your organization is one that has both values and a faith-based foundation, something is wrong and needs to be addressed.

How can a retirement plan reflect a faith-based perspective and support the values of your organization? Check out www.futurefundedministry.com for an overview of how retirement planning can be a continuation of your current and future ministry.

B. Does it measure up against competitive marketplace metrics?
There is a lot of information available to help with this. Information that is available from sources such as The Faith-Based Retirement Plan Survey results. Issues dealing with cost, investment selection and mix, education system relevance, ease of administration and the integrated ability for each participant to self-administer are some of the keys for a meaningful evaluation.

C. How well is your retirement plan truly working for you?
Does it work administratively? For your staff? A word of warning: The staff you should be concerned about is not the 10% of your staff who are investment knowledgeable and retirement plan pros. They will generally be ok with whatever plan you have. You should be concerned with the staff who are not engaged, know little, and may be scared of addressing the topic of retirement

3. Connect with a plan provider that right for you.

This is critical.

Intuitively, we all recognize that not having the right tools to do a job or having the wrong person in a leadership position can be disastrous. The same is true for retirement plan providers. Like almost every other product or service, they come in all shapes, sizes and descriptions. Among smaller or medium sized plans, insurance company providers are the most prevalent. Often this is because a friend, associate, or church member is in the insurance business and brings the solutions to the table they are most familiar with. We all recognize that this approach may not bring the desired results measured against any meaningful criteria.

In the area of investments, generally, the menu of options and the choice of investments is determined or significantly influenced by your “financial” representative. Their perspective may be limited, yet, their recommendation is followed due to a personal relationship with a member of your key board or staff.

Did you know that there are now a few faith-based mutual funds (about 120) and an increasing number of screened faith-based investment options available? Check out this whitepaper that describes the difference between a secular and faith-based retirement plan.

So there you have it, 3 key steps to impacting the future of your employees, staff, ministry team, and maybe even yourself. Put that process not only on your "to do" list, but make it a part of your strategic action plan, even yet this year.

Let me know your thoughts by commenting: What is the most challenging hurdle you face when talking to employees or co-workers about retirement?

Do you want more insight on retirement and financial advice? Subscribe to the Trusted Advisor,a daily newspaper delivered directly to your inbox. The content is carefully selection and will inform and engage you with perspective about the economy, investments, retirement planning, and financial matters, important, fun, and truly helpful.