Facts & rights
Since the shift away from defined benefits pension plans in the '80s, America’s retirement system generally makes you responsible for saving, investing, and planning for your own retirement. To help you achieve a secure retirement, regulators and policymakers have provided clear guidelines and rules to help you manage your own money inside your 401(k) plan.
With individual responsibility comes individual choice. You can’t choose who holds your 401(k); your employer makes that decision. But the choice of who you go to for help managing your 401(k)s belongs to you, not your employer or the financial institution holding your 401(k).
Pontera allows a registered financial advisor of your choosing to help you manage and plan holistically, no matter where the plan is held.
Four key facts to know on the history of 401(k) participant rights
Participants have sought help from their personal advisors for decades. Over time, regulators have provided support for participants making that choice.
How 401(k) advice works
People can choose to get advice either “inside their 401(k) plan” or “outside their 401(k) plan.” This is why the Department of Labor issued its 1996 guidance, to help clarify the difference and to ensure that employers aren’t open to liability for investment advice that their workers get outside the plan.
Inside the plan
Employers are responsible
Qualified default investment alternatives
Plan-provided advisors
Managed accounts
Outside the plan
Employers are not responsible
The internet
Independent advisors
Holistic planning tools
DOL IB 1996-1 protects plan fiduciaries from third-party advice
In-plan
Your employer might offer advice as part of the plan. The plan is often responsible for these services, because they are provided through the plan.
Out-of-plan
You might do research online or ask your personal advisor for help. The plan is not responsible for these services, because they are not providing them to you.