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  • Writer's pictureClayton Wood

The Biggest 401k Fiduciary Fireworks, Fizzles, And Flops In 2021

Each new year presents to you a time to take a look back and a look forward. Between the two, looking backward always presents the most fun. (And by “fun,” think of Nelson’s classic “Ha-HA!” snark on The Simpsons.)

In this vein, we’ll take a moment to consider some of the highlights, lowlights, and no lights of the past twelve months. No doubt you’ll shake your head in agreement as you peruse this list. As a special bonus, there’s also no doubt some of you (who have been paying attention) will say, “That’s a settlor decision, not a fiduciary duty.” Yes, that may be the case, but, truth be told, chances are if you’re a 401k fiduciary, you’re thinking about these things, even if they don’t strictly fall under the category of “fiduciary responsibility.”

So, let the games begin! Let’s see what we’ve heard from front-line service providers regarding the biggest 401k fiduciary fireworks, fizzles, and flops we found in 2021.


First, we’ll begin with the good news. That’s what fireworks are: pleasant, enjoyable, and generally a sign of celebration and achievement. With this spirit, let’s jump right in and rejoice that 2021 has proven that employees are getting smarter and, as a result, richer.

“The most surprising thing that we saw was the number of employees that increased their savings contribution rates by year-end,” says Clayton Wood, Managing Partner at C. B. Wood Financial LLC in Charlotte, North Carolina. “At the beginning of the year, we heard high amounts of worry from employees contributing to their employer-sponsored retirement. To our surprise, we saw a significant increase in employee contribution rates, with many individuals starting to participate for the first time. This most likely was the case because of employee’s nerves being settled with a high increase in the stock market and more people coming back to work.”

Alas, all good things must come to an end. Other things, however, just fade away in a quiet fizzle, hoping nobody notices.


To be honest, flops may not be forever. They may just be good ideas before their time. This means if you’re going to belittle them, you best hurry, because, if you wait too long, you may just discover they aren’t flops anymore. As a result, let’s not waste any time before the shelf-life of these flops expire.

“The biggest flop for retirement plan sponsors in 2021 were Pooled Employer Plans (PEPs),” says Wood. “The PEP was established from the SECURE Act that was enacted on January 1st, 2020. A Pooled Employer Plan allows small and large employers to pool their retirement plans into a single 401k plan to gain access to more competitive services and offerings while enjoying lowered fees because of the economy of scale from the larger plan. Some touted this as the future of the industry, but we saw many plans being built not come to fruition. There are many reasons why these plans did not work, but our consensus is that employers want full control of the retirement savings of their employees.”

Read the Full Article written by Christopher Carosa here: The Biggest 401k Fiduciary Fireworks, Fizzles, And Flops In 2021

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