We're in the final stretch ofthe year, and that means it's that time when business executivesreflect back on the past twelve months. Those responsible for thecompany's 401(k) plan may find themselves feeling anxious. (Photo:Shutterstock)

They say a bull market climbs a wall of worry. That might leadone to the conclusion that, contrary to popular belief, worrying isactually a good thing. In fact, if you're a plan sponsor, worrying is not only a goodthing, it's a proactive method for keeping yourself out oftrouble.

We're in the final stretch of the year, and that means it's thattime when business executives reflect back on the past twelvemonths. Those responsible for the company's 401(k) plan may find themselves feeling anxious(see “7 Concerns on the Forefront of 401k Plan Sponsors'Minds Right Now,” FiduciaryNews.com, November 27, 2018). Andthat's not a bad thing. Here's why.

Most plan sponsors don't think “401(k),” “ERISA,” or “Retirement” on a 24/7 basis. Rather, their 24/7world consists of production efficiencies, sales quotas, and profitmargins.

When they finally do turn their filled-to-capacity attention tothe 401(k) plan, they have more questions than answers: Do we havethe right policies? Should we allow hardship withdrawals? Has theplan document been updated to comply with the latest regulations?Are we doing enough to help our employees retire comfortably? And,most important, how much liability am I really exposing myselfto?

The lack of answers to questions like these breeds uncertainty.And uncertainty breeds anxiety.

That's normal and that's good. It's good for the plan sponsor,and it's good for the plan participant. It virtually guaranteesalignment of the best interests of both parties.

A plan sponsor who worries about the plan is more likely to tryto alleviate those worries. This means double-checking variousareas of concern. Companies accomplish this either throughdedicated personnel (if they're large enough) or throughthird-party providers.

In either case, plan sponsors worry enough to understand thevalue of relying on someone who is looking at all the factorsinvolving the plan on a 24/7 basis. Such reliance reduces thelikelihood of a significant error.

In an ironic twist, the actions resulting from excess anxietycan result in reduced anxiety. In other words – and this is wherethe irony comes in – you can't dampen down your worry unless youare worried in the first place.

Maybe it's easier to understand this by imagining the oppositetook place. Suppose, instead of being overly concerned about their401(k), plan sponsors were apathetic. They simply don't care aboutit. Because they don't care, they don't hire competent serviceproviders. Because they don't care, they don't adopt policies thatincrease the odds their employees will retire in comfort. Becausethey don't care, they don't keep their plan in compliance with thecurrent DOL and IRS rules.

What do you get from an apathetic plan sponsor? A mess. The kindof mess Mr. Schlichter and his tort-attorney buddies constantlysearch for.

That's not a good thing for plan sponsors, primarily becauseit's not a good thing for plan participants.

Can you see why we should encourage plan sponsors to worry more?It's the best way to spur them to embrace the actions that willmost protect them as well as their employees.

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