There is a new government requirement that employers with a 401k plan disclose to participants the costs.
If you are an employer, you need to look at your plan to find out the costs and see if they are as low as they should be. For the majority of people reading this post, they are not.
If you are with an insurance plan, a bank or typical brokerage firm plan your total costs are likely to be over 3%. Unfortunately, without help you probably can’t find all the costs and the person who put you into the plan has a vested interest in your not finding them. That’s a compliance problem and a problem for you and your employees. You need to address the issue before disclosure to your employees.
Call me and I will help you find your total 401k costs. They should be somewhere between 1.4% – 2.0% including the expense ratios (OERs) of the mutual fund choices, the administration and reporting costs. enrollment meeting, employee advice, etc. There is no good reason to pay for a plan that is more expensive than it needs to be.
If you are a 401k participant let me know and I will contact your employer to find out what the real costs are. You will receive a notice in May as to costs for your plan but it may not be accurate.
Cornerstone Investment Services works with several 401k providers, including those for small businesses, a plan that pays revenue sharing to offset administrative costs, and one from a major payroll company that may be better than you can get from them directly. Two of the three plans allow us to choose from among thousands of mutual funds to find the right mix for your plan.
Give me a call at 704-698-1040.