401k programs come in many different shapes and sizes and are offered by many different companies. 
Unfortunately, this means there is no one size fits all approach to 401k plans for pharmacies. However, there are certain things that the most successful programs have that the others don't. When we explain this to pharmacy owners they always mention that they want to know what these are.
After explaining them to the owners, they realize that there are many different improvements that can be made to any particular plan. These typically are unique to each individual plan. However, there are some that are common to all 401k plans. And, owners typically want to know how to improve their plan specifically.
There are three things you can do right now to improve your plan. They are:
1. Reduce your fees - this is the second biggest factor in determining the return you and your employees experience in the plan (we will discuss the number one factor in our next blog). The correlation between fees and returns is as follows: a one percent reduction in fees results in a one percent increase in return.
2. Offer portfolios to your employees - research has shown that employees have a hard time understanding investing when all they have is a list of mutual funds from which to choose. Offering portfolios with different risk and return characteristics (aggressive, moderate, conservative, etc.) helps the employees make better decisions with their money.
3. Make education a cornerstone of the plan - your plan is only as good as the education being offered to the employees. If the employees do not understand how to use the plan to retire, then they most likely do not consider it a benefit (this defeats the purpose). The advisor to the plan should make him or herself available for one-on-one sessions with the employees to help them better understand what it will take for them to retire.
Where does this wisdom come from?
The content of this blog is inspired and verified by our experience helping independent community pharmacists create extremely valuable retirement plan benefits.
When a pharmacist reaches out to us for information and help, we endeavor to give them as much free value as is possible. In addition to providing educational, self-assessment and strategic planning tools, we are happy to assist in evaluating any pharmacy sponsored retirement plan.
The first step of the process is contacting Waypoint in order for our advisors to get basic information about the plan.
If you wish to learn more about any aspect of our work, the free value we offer, or to have you plan evaluated, visit the web site at www.pharmacy401.com or call 843.873.4420 and ask for Ben or Matt Coakley.
At Waypoint Pharmacist Advisors, we take care of you!
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