Small Business 401(k) Blog

The Frugal Fiduciary Small Business 401(k) Blog

Get the latest industry news, deadlines and tips you need to know to help tackle your fiduciary responsibility needs.

Eric Droblyen

Eric Droblyen began his career as an ERISA compliance specialist with Charles Schwab in the mid-1990s. His keen grasp on 401k plan administration and compliance matters has made Eric a sought after speaker. He has delivered presentations at a number of events, including the American Society of Pension Professionals and Actuaries (ASPPA) Annual Conference. As President and CEO of Employee Fiduciary, Eric is responsible for all aspects of the company’s operations and service delivery.

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Multiple Employer Plans | Provider Shopping

Good Luck Escaping a Pooled Employer 401(k) Plan (PEP)

By: Eric Droblyen
May 11th, 2022

While 401(k) plans must be established with the intention of continuing indefinitely, the IRS does allow employers to terminate their plan when it no longer suits their business needs. Terminating most 401(k) plans is a straight-forward process. A notable exception is Pooled Employer Plans (PEPs) – a form of “open” Multiple-Employer Plan that pools the 401(k) assets of unrelated employers. This distinction can impose serious hardships on plan participants.

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Provider Shopping | Thought Leadership

SECURE Act 2.0 – Not the 401(k) Reform Americans Deserve

By: Eric Droblyen
April 27th, 2022

On March 29, 2022, the U.S. House of Representatives passed the Securing a Strong Retirement Act – better known as SECURE Act 2.0 because it builds upon the Setting Every Community Up for Retirement Enhancement (SECURE) Act. I support SECURE Act 2.0 generally but am disappointed the bill doesn’t offer any 401(k) transparency reform. Today, 401(k) plans can be a black box of hidden fees and conflicts of interests. This lack of transparency can make it impossible for employers to offer their employees a cost-efficient 401(k) plan.

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401(k) Plan Design Checklist

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Subscribe to the The Frugal Financial Small Business 401(k) Blog and receive this free checklist for help in determing the best 401(k) plan design options and fit for your company.

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Provider Shopping | Thought Leadership | Fiduciary Responsibility

Don’t Be Fooled by These 401(k) Conflicts of Interest!

By: Eric Droblyen
April 13th, 2022

401(k) conflicts of interest misalign the interests of employers and 401(k) providers. While employers have a fiduciary responsibility to choose a 401(k) provider with “reasonable” administration fees and cost-efficient investments to make retirement as affordable as possible for plan participants, conflicted 401(k) providers have a financial incentive to push overpriced administration services and investments when lower-priced - but otherwise comparable - alternatives are available. How do conflicted 401(k) providers get away with it? Often by spinning a conflict as a benefit.

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Retirement Plan Types | Plan Design | Plan Setup

The Ultimate Guide to Safe Harbor 401(k) Plans

By: Eric Droblyen
March 30th, 2022

Safe harbor 401(k) plans are subject to employer contribution and participant disclosure requirements that don’t apply to traditional (non-safe harbor) 401(k) plans. In exchange, a safe harbor plan can automatically pass the ADP/ACP test and satisfy the minimum contribution requirement when the top heavy test fails. Because many small 401(k) plans (under 100 participants) have a hard time passing the ADP/ACP and top heavy tests, safe harbor plans are popular with small businesses.

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401(k) Fees | Provider Shopping | Fiduciary Responsibility

Five Reasons Why Hidden 401(k) Fees Should be Illegal

By: Eric Droblyen
March 16th, 2022

Cost matters a lot when saving for retirement. When paid from plan assets, 401(k) fees reduce the account returns of plan participants dollar-for-dollar. Over decades, these losses can cost a 401(k) account hundreds of thousands of dollars in lost compound interest. Given the stakes, employers have a fiduciary responsibility to pay only “reasonable” 401(k) fees from plan assets. When this responsibility is not met, business owners can be held personally responsible for restoring excessive fee payments.

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Thought Leadership | Fiduciary Responsibility

401(k) Fiduciary Takeaways from a Jerry Schlichter Interview

By: Eric Droblyen
March 2nd, 2022

Recently, I listened to an insightful interview of Jerry Schlichter by Rick Unser of the 401(k) Fridays Podcast. In 2006, Jerry was the first private attorney to file lawsuits alleging excessive fees in 401(k) and 403(b) plans. Since then, his firm - Schlichter Bogard & Denton - has won more than $600 million in settlements on behalf of plan participants. He’s also won the only two 401(k) fee cases ever heard by the U.S. Supreme Court - Tibble v. Edison and Hughes v. Northwestern University. I consider the Jerry Schlichter interview a must-listen for 401(k) plan fiduciaries.

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