Although neither the IRS nor the U.S. Department of Labor mandates that medical practices conduct 401(k) education programs for employees, doing so improves employee satisfaction and helps protect your practice against potential lawsuits by providing them with all the basics they need to make informed investment choices. Keep employees informed by following the four C's of 401(k) plan basics:
- Communication. Provide good communications, both in writing and via periodic educational meetings, to properly inform employees about their 401(k) options.
- Control. Make plan participants understand that they have control over the money they've invested.
- Choice. By law, a plan must offer its participants at least three investment choices. Try to give your employees five to eight options, ranging from low-risk money market funds to higher-risk stock portfolios.
- Change. Make sure employees know they can change their investment allocations and allow them to do so on a regular basis-at least quarterly or semi-annually.