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Are Your 401(k) Fees “Reasonable?” Benchmark Them to Find Out
Posted Eric Droblyen on Jun 28, 2017
If you're a 401(k) plan sponsor, you have a fiduciary responsibility to only pay reasonable plan fees and expenses from plan assets. Keeping 401(k) plan fees in check is one of your most important fiduciary responsibilities because even small excessive fee amounts each year can substantially reduce a participant nest egg over decades of saving. Excessive 401(k) fees can also mean severe ...
The DOL Fiduciary Rule – What Employers Need to Know
Posted Eric Droblyen on Jun 14, 2017
On June 9, the Department of Labor's (DOL) Fiduciary Rule took effect and upgraded every stock broker and insurance agent with a 401(k) client to a plan fiduciary under ERISA. However, there is a catch – while these financial advisors were made ERISA fiduciaries on June 9, the DOL won’t “pursue claims against fiduciaries who are working diligently and in good faith to comply with the ...
401(k) Distribution Rules – Frequently Asked Questions
Posted Eric Droblyen on May 31, 2017
If you participate in a 401(k) plan, you should understand the rules for withdrawing money from your account – otherwise known as taking a distribution – even if you don’t plan to touch this money for decades. 401(k) plans have restrictive distribution rules that are tied to your age and employment status. If you don’t understand your plan’s rules, or misinterpret them, you can pay ...
Acquisition or Merger? Don’t Overlook the Seller’s 401(k) Plan!
Posted Eric Droblyen on May 17, 2017
If you’re a small business 401(k) plan sponsor considering the purchase of another company, the last aspect of the deal you’re probably considering is the seller’s 401(k) plan. However, it’s important for you to have a strategy for that plan in place before your deal is closed. Otherwise, you could be stuck with a 401(k) plan that includes costly protected benefits or uncorrected defects.
DOL Fiduciary Rule: Good for Business But Opposed by the U.S. Chamber of Commerce
Posted Eric Droblyen on May 3, 2017
In February, President Trump ordered the Department of Labor (DOL) to review the Fiduciary Duty Rule as a likely pretense for killing it. To complete the review, the DOL delayed the rule’s implementation by 60 days and asked the public for fresh comments.
New Comparability 401(k) Plans - Are They Right for Your Small Business?
Posted Eric Droblyen on Apr 19, 2017
One of the most common goals for a small business 401(k) plan is maximizing owner contributions up to the legal limit - $60,000 for 2017 (assuming employee catch-up contributions). Often, the cheapest way to meet this goal is using a new comparability profit sharing contribution. Unlike other types of 401(k) profit sharing, these contributions permit an employer to allocate multiple ...
Fee Study of 525 401(k) Financial Advisors – Why Trump Can’t Reverse Tide of Fiduciary Advice
Posted Eric Droblyen on Apr 5, 2017
This week, the DOL delayed the effective date of its Fiduciary Rule – which would define all retirement plan financial advisors as ERISA fiduciaries, effectively banning conflicted 401(k) investment advice that puts advisor profit ahead of client interests – by 60 days from April 10, 2017 to June 9, 2017. The delay was triggered by a memorandum from President Trump that directed the agency ...
The Top 4 Lies Told by 401(k) Providers
Posted Eric Droblyen on Mar 22, 2017
After the death of his beloved mother, Harry Houdini was desperate to contact her from beyond the grave with the help of psychic mediums – who claimed an ability to communicate with the dead. Mediums were very popular at the time, but it didn’t take long for Harry to discover they couldn’t do what they promised. Upset, Harry became determined to expose their lies to protect unwitting ...
401(k) Fees – Frequently Asked Questions by Plan Fiduciaries
Posted Eric Droblyen on Mar 8, 2017
Small businesses that sponsor a 401k plan have a fiduciary responsibility to only pay necessary and reasonable fees from plan assets. Keeping 401k plan fees in check is one of the most important fiduciary responsibilities because excessive fees reduce investment returns unnecessarily, making a comfortable retirement for plan participants less affordable. Not meeting this responsibility can ...
401(k) Index Funds – They Make it Easy to Reduce Fiduciary Liability
Posted Eric Droblyen on Feb 22, 2017
Investment in equity index funds – and other passively-managed investments designed to track a market index – is exploding. According to a Morningstar study, these investments took in a record $504.8 billion in 2016. That’s in contrast to actively-managed funds, which are designed to outperform an index. These funds experienced outflows of $340.1 billion in 2016.
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