Commentary: Plan sponsors can help themselves and their participants over the long term by rolling balances of $5,000 or less from inactive participants into safe harbor IRAs. However, for various reasons, many safe harbor IRAs dont live up to their name and could leave sponsors with unexpected fiduciary liability.
The best way for sponsors to avoid exposure to this liability is to choose an automatic rollover (ARO) provider that offers a fiduciary-friendly fee schedule and has a proven track record of moving safe harbor IRAs forward to account holders active 401(k)s. Constructing an ARO program with these features validates that sponsors are serving the best interests of participants, and making every effort to protect even very-small-balance participants hard-earned savings.
