Employers are required to act in the sole interest of participants in the 401(k)
plan and an essential part of that obligation is to ensure that employees find their
plan to be workable. The possibility of an employee lawsuit is raised when employees
are displeased with their plan.
Most plans rely on employee volunteered complaints. While this approach does work,
problems may be severe before they are identified.
Alternatively, plan sponsors can be pro-active and determine whether a plan is effectively
meeting the employees’ needs before it becomes a problem. Asking employees about
how well the plan is working for them and for ways to improve is procedural prudence
that also offers protection from liability, should there be a problem later.
Copyright © 2009 DALBAR, Inc. All rights reserved