"Rookie" Mistakes Every Retirement Plan Provider Should Avoid. 

How to inject "life" into a 401(k) enrollment meeting.

How to keep things interesting for plan participants.

When it comes to oral or written communications, it's important that you play to your audience. Any communication that is above or below the audience's comprehension is going to be a missed opportunity to communicate your message.

When it comes to 401(k) plan meetings with plan participants for enrollment or reenrollment, fact is that most of them suck.

The greatest education I ever received wasn't at law school and it wasn't working as an ERISA attorney for 9 years working for third party administration firms. My greatest education was being involved in student politics and journalism at the State University of New York at Stony Brook (which is now called Stony Brook University).

One of the simplest lessons I learned was from Ron Nehring, who has been a friend of mine for over 20 years and he basically told me that the goal of any organization in recruiting new members is getting them involved. I joined Ron's political organization because they got me interested, got me involved, and kept on contacting me about other events. The Jewish students organization that I was going to be heavily involved had a barbecue the weekend before freshman year started. I arrived 15 minutes late and there wasn't anymore food available. I was offered a bagel and people who certainly weren't Jewish were enjoying a nice Kosher hot dog or hamburger. Needless to say, I didn't get involved much there.

The point is that most 401(k) plan meetings suck because they really aren't geared towards plan participants. The advisor conducting the meeting is giving the basics of investments and plan features that isn't interesting or inspiring. The meetings tend to be really dry when they don't have to be.  I've been at funerals that have been more livelier than enrollment meetings.

How would I liven up an enrollment meeting?

1)   Raffle off a $25 gift card at every enrollment meeting. People like free stuff and if they know then can win something by attending, they will. Of course, have the raffle at the end of the meeting, so it ends on a good note.

2)   Presentations need to be clear and crisp. Less is more. Powerpoint presentations and slide handouts shouldn't be overloaded on details. Illustrate the important points.

3)   Add humor and cultural references. With apologies to my former managing attorney who wouldn't know good marketing if it was standing behind her, adding humor and cultural references goes a long way. My articles aren't widely read because of my rugged good looks or lack thereof. They are widely read because the humor and cultural references engage the reader into reading what should be a dry topic, i.e, the ins and outs of retirement plan sponsorship.

4)   Break it down. Again, my writings are written in easy to understand English, not what I call ERISAese. The easier for plan participants to understand what you're saying, the more likely they will remember what you're saying.

5)   Keep it short. Spend more than a half hour or hour, you will lose your audience. Again, less is more.

The retirement cap is a threat to the Retirement Plan Industry.

A cap will have a detrimental effect on the industry.

Any industry needs to identify threats to its existence and develop a course of action to defeat that threat. The music industry is a shell of its former self. While they were awarding large contracts to artists like Janet Jackson and R.E.M. in the late 1990's, they failed to see the threat of mp3 files to their business of selling compact discs. While they had every right to pursue a legal action against Napster for copyright infringement, they needed to develop a legal service for the delivery of mp3 files to those willing to pay. So instead of capitalizing on the idea of an mp3 service, they let a struggling computer company in to develop their own service called ITunes and the rest is history: ITunes led to the IPod, IPhone, and IPad and the music business is a sell of its former self.

Whether you are a Republican or a Democrat, you understand that we have a tremendous national debt problem and the problem will get worse over time. President Barack Obama's 2014 proposed budget includes a provision that would cap how much people could keep in tax-preferred retirement accounts at $3 million.

The retirement plan industry is predicated on people savings for retirement. Clearly, the upper middle class and upper class save more for retirement than the other half. Clearly, any caps will have a deterrent effect on wealthy people saving for retirement. Whether you have the idea to soak the rich or not, any cap on retirement savings will have a negative effect on the retirement plan industry, especially those who bill on plan assets such as financial advisors, custodians, mutual fund companies, and third party administrators.

While we need a plan to trim our deficit, a raid on the retirement accounts of some of our wealthier plan participants is only going to imperil our bottom line.  The cap is a threat to our livelihood in this industry.

The unintended consequences of the Obama 401(k) Cap.

It will hurt a lot more 401(k) plan participants, that's for sure.

When politicians and their supporters talk about that some people should take a greater share of the burden, more people (especially those who this share of the burden was supposed to help) end up paying a price.

President Obama's new budget proposal aims to trim Americans' nest eggs by setting a cap on lifetime contributions of 401(k)s at an average of $2.7 million will end up hurting more people than just getting the rich.

Initially, the Employee Benefit Research Institute estimates close to 1 million young people in their 20s and 30s who are aggressively saving through their defined-contribution plans, as well as older people who have accumulated a few million dollars collectively in all their retirement accounts, could run into the cap problem.

In addition, the "chutzpah" of this proposal is calculating the limit and who actually has to do it. Obama proposes to limit the deduction or exclusion for contributions to defined-contribution plans, defined-benefit plans, or IRA for an individual who has total balances or accrued benefits under those plans that are sufficient to provide an annuity equal to the maximum allowable defined-benefit plan benefit. The maximum benefit, the administration said, is currently an annual benefit of $205,000 payable in the form of a joint and survivor benefit commencing at age 62, is indexed for inflation, and the maximum accumulation that would apply for an individual at age 62 is approximately $3.4 million.

Did you get that? Of course not? Do you know who will have to calculate these limits, as it is tuned in to the defined benefit plan limit? Of course, employers because they have nothing better to do.

If you tell employers that they will have to enforce a benefit limit on their top paid people and in most instances, the very same people they are talking to. Do you think employers who are told that they have this added recordkeeping burden as well as limiting benefits to their top paid people is less likely or more likely to maintain a 401(k) plan?

While the latest Frontline documentary pin the death of defined benefit plans on 401(k) plans, people forget that limits placed on defined benefit limits set for the by TEFRA and the Tax Reform Act of 1986 did more damage to defined benefit plans as it limited the benefit and compensation earned by the top people for the employers maintain them. So while people think that limiting benefits to the top paid people was a good thing, it hurt lower paid people worse. The coverage of lower paid people in defined benefit plans went from 24% in 1981 to about 17% in 1987 because so many employers wanted to chuck defined benefit plans because they were no longer a bigger bang for the buck, thanks to these limits.

So imagine what this latest proposal will do to 401(k) plans. People who forget history are soon doomed to repeat it.  Employers will terminate 401(k) plans if their top paid people have their benefits limited and the employers are forced to calculate and enforce that limit. We have a retirement plan crisis and any proposal that has the intended or unintended effect of having lower paid people saving for retirement plans must be stopped.