The responsibility of being a retirement plan sponsor is like the responsibility of flying a group of passengers from one location to another. Are you and your team operating like a “pilot in command?”…(read more)

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When it comes to retirement planning, the role of the plan sponsor is often compared to that of the pilot in command of an aircraft. Just as a pilot has the ultimate responsibility for the safety of the passengers and the success of the flight, the retirement plan sponsor is responsible for the financial security of its plan participants.

Here are some of the ways in which retirement plan sponsors are like pilots in command:

1. Both need a plan:

Just as a pilot needs a flight plan to ensure a successful journey, a retirement plan sponsor needs a comprehensive plan to ensure that their plan participants reach their financial goals. The plan should include investment options, contribution limits, and rules around when and how employees can access their retirement funds.

2. Both must navigate complex regulations:

Pilots must navigate complex weather patterns, air traffic control, and other regulations to reach their destination safely. Similarly, a retirement plan sponsor must navigate complex rules and regulations from various government agencies to ensure their plan complies with all necessary laws.

3. Both must prioritize safety:

The safety of passengers is always the top priority for pilots, and the safety of retirement funds is the top priority for plan sponsors. Plan sponsors must ensure that investment options are carefully selected and monitored. They must also safeguard plan assets from being used for anything other than retirement benefits.

4. Both must stay vigilant:

Pilots must remain vigilant throughout their flight to ensure the safety of everyone on board. Similarly, retirement plan sponsors must regularly review and monitor investments and plan operations to ensure they continue to meet the needs of plan participants.

5. Both must be prepared for emergencies:

Pilots must be prepared for emergencies, such as medical issues or mechanical failures. Retirement plan sponsors must be prepared for market downturns and economic crises. This means having a plan in place to address potential risks and ensuring that participants are informed and prepared to weather such storms.

In short, as the pilot in command of an aircraft, the retirement plan sponsor is responsible for ensuring that the journey is safe, successful, and gets everyone to their destination as planned. By understanding the parallels between these two roles, plan sponsors can better prepare for the challenges ahead and ensure that they are providing their participants with a retirement plan that will help them reach their goals.