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:
During the 401k plan design process, we get a lot of questions from small business 401k fiduciaries about employee eligibility. They want to know when they should let new employees into their 401k plan and their options for keeping certain employees – generally the ones that won’t participate – out.
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.
Small businesses can have dramatically different goals for their 401k plan. While some want to maximize key employee contributions, others want to incentivize rank-and-file contributions. 401k fiduciaries have nearly endless options for meeting these goals – many with very different expenses. The process of matching 401k goals to available options is called 401k plan design.
Meaningful 401k fee data is hard to come by – and that’s a big problem for small businesses. Sponsors of small business 401k plans have a fiduciary responsibility to keep 401k fees reasonable for plan participants. When this responsibility is not met, the consequences for 401k fiduciaries can be severe - including personal liability.
Critics of the DOL’s proposed fiduciary rule, also known as the "conflict of interest rule for investment advice," argue that the rule will make investment advice too costly for many 401k plans. If the critics are right, this issue would be a compelling reason to scuttle the rule – studies have shown that professional advice can help 401k participants increase investment returns. An Aon Hewitt study found that median investment returns for 401k participants using target-date funds, managed accounts and other investment advice were 3.32% greater than returns earned by participants that picked investments themselves.
Service intended to help small businesses take current DOL fee disclosure regulations a step further.