Don’t feel like the Lone Ranger. Many business owners don’t understand the fees employees are paying for their 401(k) plans.
A recent nationwide survey of 500 small businesses (with 100 or fewer employees) by ShareBuilder 401k found that employers’ inability to figure out these fees leaves them unprepared for the questions their plan participants are asking — a situation that could cost workers big bucks.
The survey found that most small business owners are unaware of what constitutes a fair percentage for 401(k) fees. Says ShareBuilder 401k president Stuart Robertson, “Everyone has a right to know the fees they’re paying for their 401(k), because, over the course of a career, paying an extra percentage point can shrink [a retiree’s] nest egg by hundreds of thousands of dollars.”
Although most survey respondents said they were aware of new rules requiring 401(k) providers to distribute documents that disclose all plan fees fully, nearly 40% did not recall receiving the new documents. Those who did get this information spent an average of only16 minutes reviewing it; and 83% of them had questions about what their company should do next. More than two in three (68%) were unprepared to answer employees’ questions about their plans.
We’d be happy to help you find the best, and most cost-effective, plan for your workers. Feel free to get in touch with us at any time.