Calculate Your Employee ExpensesUsing the new fee disclosure document that was sent to you by your provider, take the total amount of investment fees paid (total of fund expenses and all other investment fees) and divide that number by your plan’s assets. Ideally, use the average balance of your plan over the last year or your calculation will likely understate your fees.
2. Compare Costs of Plans Offered by Other 401(k) Providers
Now that you’ve calculated your employee fees, if that rate is greater than one percent, you know you’re in a higher priced plan – and that can cost your employees a very material and sizeable chunk of their retirement over a career. You’ll likely want to do some shopping around for a better deal. Some providers will create a custom cost comparison at no charge or obligation to help you see how different plans stack up.
3. Make the Switch if You’re Paying Too Much
Plan sponsors need to proactively determine if their company sponsored retirement plan is efficient enough for their employees to successfully retire. The service providers they contract with are under no obligation, legal or otherwise, to offer asn efficient plan. Their only objective is to make the sale and collect fees.
Please comment or call to discuss.