If you're thinking about offering your employees a 401(k) plan, make sure you've covered the basics. Ask yourself these questions:

1. Are you absolutely sure that you understand the risk and rewards of every investment option in your 401(k) plan?

2. Are you sure that the investment education you are providing objectively answers all the questions that your employees are or should be posing?

3. Does your education material help the employee understand how much he or she will actually need in retirement?

4. Have you evaluated today's life expectancies for retirees?

5. Does your education material include all that a participant should know in order to make wise decisions on the tax laws governing distributions from the 401(k)?

6. Does your education program help employees deal with life issues and intergenerational issues such as:

  • Children's long-term education expenses.
  • Disability protection.
  • Setting up wills and trusts.
  • Long-term care.
  • Elder care.

Your responsibility as the plan sponsor also may require you to provide your employees with other information including financial planning, investment risk analysis and tax disbursements. The company administering your 401(k) plan may offer these services. If not, you may want to hire an investment advisor to work with your employees on these issues.

Creating an investment policy statement for your 401(k) is a good idea. This outlines the different guidelines for your company to follow regarding its investment options. Also, it could potentially shield your company from being sued.

The investment policy statement should list your company's guidelines for reviewing investment options, educating your employees on managing their investments and reviewing the plan to make sure it is meeting your company's performance goals.

The more assistance you provide in comprehensive financial planning, the better it will be for you and your employees.

For more information, call Brad Williams, Insurance & Consulting Associates, Kansas City, Mo., (816) 505-2441 or e-mail at bwilliams@yourinsuranceagency.com