A Retirement Plan Sponsor is Like the Pilot In Command of An Aircraft

The responsibility of being a retirement plan sponsor is like the responsibility of flying a group of passengers from one location to another. Are you and your team operating like a “pilot in command?”


Pat: Hi, I’m Pat Alfano and I’m joined by my business partner, Dave Anderson. With our analogy, who would be better to help explain the similarities than a pilot himself.  You may have met my business partner, Dave Anderson, through another of our videos, but I’ve invited Dave to give us the perspective about mitigating risks as a pilot.

Dave: As a pilot for 27 years, I was all too aware of the work and preparation that went on behind the scenes before passengers could board the plane for take off.  Prior to every flight, I completed an extensive pre-flight checklist both in the cockpit and around the different components of the plane.  I was trained not to veer from the process, because lives were at stake every time we pushed back from the gate. It was my responsibility to ensure (to the best of my ability) that there were no issues that would create a possible safety hazard.  I loved flying as the pilot in command and being able to get our passengers safely to our destination, despite the risks.  Likewise, business owners and employers should appreciate the ability to help their employees with retirement savings goals through a group retirement plan.  The group retirement plan is one of the most utilized vehicles for the American workers because it is efficient and has certain advantages over other savings vehicles, however, just like a pilot of an aircraft, employers also carry risk as a retirement “plan sponsor.”

Pat:  Thanks Dave.  I’m grateful that you took such great care as a pilot, and it’s been great to watch how you have carried over your risk mindset into how we operate our business today.  Let’s continue the flight analogy from the perspective of the passenger and retirement plan participant.

Let’s assume that the flight for a passenger is like the retirement timeline for a plan participant. As airplane passengers we usually enjoy a smooth flight that allows us to get to our destination safely, and more efficiently that other forms of transportation. Sure, there are minor inconveniences like turbulence, a child being disruptive, or if you’re like me, the size of the seats aren’t necessarily as large as we’d like, but altogether we continue to choose air travel because it works best for long distances.

In the same line of thinking, a retirement plan participant takes advantage of automatic salary deferral, and investments that are built to weather the “turbulence” of investing over long periods of time, in order to get them to their retirement destination.

Just like turbulence on a plane, market volatility can create some disruption during the journey. Additionally, the disruptive child on the plan could be represented by the doomsday headlines that bombard our screens daily about our investment and our futures. While there may not be a direct tie to the airplane seats being “too small” in the world of retirement investing, the experience that a pilot wants for his passengers is the same as what a plan sponsor wants for their participants in many regards.

The glaring difference is that many plan sponsors don’t have the time or skill to monitor the retirement plan the way that a pilot does for their aircraft. In fact, I have found that employers that offer a group retirement plan acknowledge that there is a standard of care, laws, and time triggered actions that need to be completed. However, those plan sponsors rarely understand their team’s full responsibility and liability under the rules and regulations. Much less do they usually have the time or skill needed to tend to the plan like a pilot for their aircraft. That begs the question that retirement plan sponsors should ask themselves, “is my team in command for our retirement plan?”

The good news is that you don’t have to do it alone. I am a specialized retirement plan consultant that can act as the co-pilot, or air traffic control system that pilots rely on each and every day. You still wear the “wings” for your retirement plan, but I allow you to focus on the core mission of your business in knowing that the “flight path” for your retirement plan will always be monitored and ready for adjustments if needed.

If you have questions about how your plan is being run now, or how you’d like it to be run, let’s talk. I’m here to help so that you and your employees can stay on course.

Pat Alfano

Pat joined the Prosperion Financial Advisors team in August 2017 as a part of the Anderson team, and brings ten years of experience in the financial services industry. Starting out as an “advisor to advisors” in 2007, Pat developed his industry experience by helping advisors bring solutions to their clients with mutual funds, separately managed accounts, insurance based products, and employer sponsored retirement plans. Pat started working with clients of his own in 2015 as an advisor to individuals and institutions, and has enjoyed being able to deliver goal focused results. As an advisor, Pat believes that every individual and group deserves quality financial advice and planning regardless of their stage in wealth accumulation or distribution. As an advisor, Pat develops customized strategies for individuals and organizations in light of their unique goals and aspirations.

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This information was developed as a general guide to educate plan sponsors, but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.