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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.

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401(k) Fees

Are Your 401(k) Fees “Reasonable?”  Benchmark Them to Find Out

By: Eric Droblyen
June 28th, 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 consequences for you - including personal liability.

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Fiduciary Responsibiilty | 401(k) Fees | DOL Fiduciary Rule | Provider Shopping | 401(k) Studies | Financial Advice

Fee Study of 525 401(k) Financial Advisors – Why Trump Can’t Reverse Tide of Fiduciary Advice

By: Eric Droblyen
April 5th, 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 to complete a new analysis of the rule’s likely economic impact. As a critic of the Fiduciary Rule, it’s a good bet that President Trump ordered the DOL analysis to build a case for overturning it. If that happens, it would be a huge (yuge?) victory win for brokers and insurance agents – who are currently non-fiduciaries. According to a study from the White House Council of Economic Advisers (CEA), these advisors rake in more than $17 billion in excess fees annually due to conflicted advice. If you are a supporter of the Fiduciary Rule like me, it can be easy to be upset by the Trump administration delay. However, I’m not worried about it. Even if this ban on conflicted retirement plan advice is squashed, I am confident the die is cast. Following several high-profile excessive fee lawsuits, more 401(k) plan sponsors than ever are hiring fiduciary-grade financial advisors to lower their liability. The kicker? Their impartial advice is often cheaper than potentially-conflicted, non-fiduciary advice. And I have the numbers to prove it!

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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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Revenue Sharing | Fiduciary Responsibiilty | 401(k) Fees | Provider Shopping | Plan Setup

The Top 4 Lies Told by 401(k) Providers

By: Eric Droblyen
March 22nd, 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 customers. Like mediums, some 401(k) providers make false claims. Their lies can easily go unnoticed to 401(k) fiduciaries due to the highly-technical nature of 401(k) services. However, believing these lies – and hiring the provider that makes them – can trigger severe consequences. They often mask excessive 401(k) fees or a lack of expertise that can increase fiduciary liability. If you’re a 401(k) fiduciary, identifying 401(k) provider lies is imperative to mitigating your plan liability. The good news? Most are easily debunked with some basic facts. I’d like to channel (pun intended) Harry Houdini by exposing four of the most common lies told by 401(k) providers today.

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401(k) Fees | Provider Shopping

401(k) Fees – Frequently Asked Questions by Plan Fiduciaries

By: Eric Droblyen
March 8th, 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 also mean severe consequences for plan fiduciaries – including personal liability.

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Revenue Sharing | 401(k) Fees

Finding Hidden 401(k) Fees in Participant Disclosure Notices

By: Eric Droblyen
February 8th, 2017

In a 2015 study of 4,368 retirement plan participants, the National Association of Retirement Plan Participants (NARPP) found that 89% could not correctly calculate their account fees.  Even more disturbing, only 42% knew they were paying fees at all.  Most plan participants – 58% - were unaware that fees were being “automatically” deducted from their account.

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Retirement Plan Types | Fiduciary Responsibiilty | Safe Harbor 401(k) | 401(k) Fees | Plan Design | 401(k) Studies

Our Top 10 401k Blogs of 2016: What Topics Were the Most Popular?

By: Eric Droblyen
December 28th, 2016

Happy Holidays from the Frugal Fiduciary! As 2016 comes to a close, we looked back through this year’s blogs to find the most read.  It turns out our most popular blogs related to the following topics:

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