A recent lawsuit against Southwest Airlines Co. highlights how employees could be losing significant retirement savings due to their employer-run 401(k) plans' poor-performing funds. Abernathy Daley 401k Consultants found that nearly 84% of American retirement plans possibly have at least one type of violation that could lead to significant fines or claim in fiduciary failure.
According to Matt Daley, Abernathy-Daley's president, any oversight or lack of attention to these retirement plans often corresponds with the offering of underperforming and overpriced funds. This particularly impacts the employees, affecting their long-term saving potential. These issues often arise when retirement plans are not periodically evaluated or benchmarked by their sponsors.
To prevent such issues, employees need to educate themselves on the funds they're being charged and the amount they need to save for retirement. Steven Abernathy, CEO of Abernathy-Daley, emphasizes the importance of asking about how much needs to be saved from each paycheck to reach the desired retirement sum.
To catch these red flags, Daley advises employees to ensure that their company's retirement plan is regularly benchmarked. In case any violations are spotted, the first contact should be made to the company's HR department for problem rectification.
Abernathy underscores the importance of transparency: knowing your retirement plan's standing is as significant as immediate work deadlines. Thus, asking HR about the benchmarking analysis can similar to a mindful passenger reminding the driver of their overspeeding. In the end, you'd want your retirement to be in secure hands.