Matthew X. Smith 
Managing Your Firm’s 401(k) Plan 
A Complete Roadmap to Managing Today’s Retirement Plans

An objective resource for managing your firm’s 401(k) plan

With the recent uncertainty in the economy and financial
markets, 401(k) plans are now under more scrutiny than ever.
Written for finance and benefit professionals who are responsible
for the management, operations, or oversight of their company’s
401(k) plan, Managing Your Firm’s 401(k) Plan offers a guide
to designing and managing a 401(k) with a focus on financial,
fiduciary, and regulatory standards.

While there are plenty of books on 401(k) plans written for the
individual investor, there are very few resources for professionals
involved in 401(k) management. This book effectively fills that
void

* It was specifically written for professionals involved in
401(k) management

* It includes regulatory and fiduciary information needed for
compliance purposes

* It was created by experienced experts in the defined
contribution plan arena

Topics covered throughout this insightful guide include
measuring retirement readiness, establishing plan governance,
managing the plan’s investment menu, monitoring record keeper
performance, communicating effectively with employees, helping
participants manage their retirement income, and much more.

Table of Content

Preface.

Acknowledgments.

Chapter 1: The Importance of the 401(k) Plan.

Baby Boomers Have Reached Retirement Age.

People are Spending More Years in Retirement.

Expenses in Retirement Are Increasing.

The Shift from DB to DC.

Sharing Responsibility.

Conclusion.

Chapter 2: The Role of the Employer.

Why Do Employers Sponsor 401(k) Plans?

What Roles Do Employers Play?

Conclusion.

Chapter 3: Measuring Retirement Readiness.

Replacement Ratios.

Improving Retirement Readiness.

Conclusion.

Chapter 4: Establishing a 401(k) Plan.

How a 401k) Plan Works.

Establishing Plan Objectives.

Benchmarking Plan Design Features.

Plan Setup.

Segregation of Plan Assets.

Using Plan Assets to Pay Expenses.

Conclusion.

Chapter 5: Plan Governance and Fiduciary Issues.

Who Is a Plan Fiduciary?

Basic Fiduciary Duties.

Allocating or Delegating Fiduciary Responsibility.

The Prohibited Transactions Rule.

Exemptions from Prohibited Transaction Rules.

Establishing Roles and Responsibilities.

Conclusion.

Chapter 6: Protecting Yourself as a Fiduciary.

The Impact of Enron Litigation.

Consequences of a Breach of Fiduciary Duty.

The Voluntary Fiduciary Correction Program (VFCP).

Fidelity Bonds vs. Fiduciary Liability Insurance.

Conclusion.

Chapter 7: Establishing and Managing Plan
Investments.

The Investment Policy Statement for a Participant-Directed
Plan.

The Investment Menu.

Pre-Diversified Portfolios.

Portfolio Construction.

Selection of Investments and Managers.

Monitoring Investments.

Complying with Section 404(c).

Employer Stock in 401(k) Plans.

Default Investment Option and Mapping.

Advice and Education for Plan Participants.

Brokerage Accounts and Mutual Fund Windows.

Socially Responsible Investing.

Conclusion.

Chapter 8: Managing Your Plan’s Operations.

Monitoring Your Service Provider.

Vendor Services.

Collecting and Using Vendor Metrics.

Service Agreements and Standards.

Operational Compliance.

Regulatory Compliance.

Changing Recordkeepers.

Conclusion.

Chapter 9: Design and Management of Distribution
Options.

Vesting Rules.

Distributable Events.

Nondiscrimination Testing Failures and Regulatory
Limitations.

Forms of Distributions.

Optional Design Features.

Taxation Considerations.

Miscellaneous.

Conclusion.

Chapter 10: How Business Transactions Affect 401(k)
Plans.

Why It Matters.

Business Mergers and Acquisitions.

Divestitures and Downsizing.

Options for Distressed Organizations.

Conclusion.

Chapter 11: Financial Communication and Education for
Participants.

Why Do You Offer a 401(K) Plan?

Communication Strategy.

The Implementation Plan.

Branding your Program.

Managing Vendor Communications.

Three Times…Three Ways.

Conclusion.

Chapter 12: Helping Participants Manage Their Retirement
Income.

In Plan or Out?

Risks of Managing Retirement Income.

Retirement Income Product Types.

Additional Product Features.

Conclusion.

Notes.

Index.

About the author

MATT SMITH is Senior Vice President, National Defined
Contribution Practice Leader, for Aon Consulting in the United
States. Prior to his role at Aon, he was managing director of
retirement services for Russell Investments. Smith has been
involved with the design, implementation, administration, and asset
management of defined contribution plans for over twenty-five
years. He has written and spoken widely on topics involving defined
contribution plans. Smith has been quoted by numerous trade and
professional publications, including Plan Sponsor, Employee Benefit
News, and Pension & Investments.