Conferences are a great place for us to meet with vendors and other advisors to gain insight, share best practices and identify trends. Our goal is to gain knowledge that helps us help our clients. I was recently reviewing the agenda for an upcoming conference and noticed a session titled, “Small Plans, Big Margins”.
What is the point of your 401k plan? No, this is not a trick question, just a reality check. Often a 401k plan is one of those things a business must have to compete for employees, to fit in, to meet employee expectations. Sometimes we forget that the real purpose of a 401k program is to provide a way for employees to retire someday.
Qualified plans, such as a 401(k) plan, offer excellent benefits for small business owners. These plans can provide a multitude of tax advantages that combine to deliver far more tax leverage than most people may imagine.
We get it. As a business owner, you work hard to grow your company and do not need another thing on your plate. Yet, the reality is your 401k could become a liability instead of an asset if not properly managed.
Instead of locked in their office evaluating funds or simply selling you a plan and walking away; the next generation 401k advisor helps you manage the plan, emphasizes retirement education and seeks retirement readiness for your employees.
In 2015, we introduced a Multiple Employer 401k, powered by Pentegra, that bundles 3(38) and 3(16) services into the core package. By joining forces with other plans, you can gain access to fiduciary outsourcing, institutional share classes and other “large” plan features at an affordable price point.
401k Plan Sponsors have a fiduciary duty to manage their 401k for the benefit of their employees. Most employers want to do it right, yet in 2016 alone the Employee Benefits Security Administration closed 2,002 civil investigations resulting in 1,356 monetary outcomes totaling more than $777.5 million.*
Your 401k plan advisor is a key service provider to your plan. A modern 401k specialist will not only help you manage the plan, but will take an active role in participant education and even one-on-one advice.
Did you know that financial education could help save up to $2,000 per employee annually through increased productivity, reduced health care costs, and better utilization of employee benefits; and research and analysis indicates a 3:1 return on employer investment in education? *
Multiple Employer Plans (MEPs) are one of the most cost effective and efficient ways to sponsor a retirement plan. MEPs offer economies of scale that make it affordable for employers to outsource the plan’s principal fiduciary roles and simplify and streamline plan administration
A well-designed 401(k) plan can help attract, retain and reward talented employees. Many small businesses have a strong desire to offer a 401(k) or other retirement plan but face considerable hurdles in terms of cost, expertise and dedicating the necessary time to properly run the plan. Multiple Employer Plans (“MEPs”)eliminate these hurdles.
Most employers overlook many of the following duties of retirement plan fiduciaries. More often than not, these are examples that result from ignorance more so than willful disobedience, combined with a mistaken belief that third-party administrators (TPAs) are handling everything for them
At Six8 Advisors we routinely meet with small to mid-sized businesses to discuss their 401k plan. While some employers do a great job, we often hear similar stories as to why employers are not managing their 401k.
After an extensive review of retirement plan services, advice and fees, we arrived at a simple conclusion; it makes more sense to price our services based on what we do for our clients, the liability we assume, and the advice we give rather than an arbitrary percentage of plan assets. The result is what we call Activity-based Pricing.
Very few employers pay 100% of the cost of their 401k plans. Most often, plan services, including the Advisor, are covered by asset-based fees deducted from participant accounts. There is not a thing wrong with this approach, unless the participants are not getting what they pay for.
Many plan sponsors do not realized the importance of participant engagement. A strong participant program can dramatically influence plan participation, employee deferral rates, and even overall employee financial health. Employers who provide financial education to employees are taking steps to improve employees’ lives and even the business as a whole.
By this time in a 401k project, we have reviewed the plan design, plan service providers, fiduciaries and the investments. If any there are any updates, then the changes must be implemented. Implementation can range from simply changing a fund choice to a complete replacement of the plan design and plan vendors. This process is straight-forward, but must be managed correctly to ensure a smooth transition to your new plan.