Cost Of A 401(K)
By: Chad Halbur
Do you know what your 401(k) plan is costing you as the employer? What it is costing you as a participant?
The average cost to offer a company sponsored 401(k) plan is between 2.0 to 3.0% of the value of plan assets! Many business owners are under the impression that they are not paying any costs for the company retirement plan, but that is simply not true. Despite the many investment platforms available, there are a limited number of ways the fees can be charged. Fees can be paid by the employer, paid by the participants, or a combination where the fees are shared between the employer and participants. A generous employer that picks up these costs does not want the cost to be a drag on the profitability of the corporation. If participants are paying the costs, you do not want it to be a drag on the investment performance of their (your) retirement savings. The goal is to keep costs as low as possible without sacrificing the integrity of the plan.
Did you know that you have choices in how the plan is set up? Those choices could allow for additional funding each year. Is your current plan set up to maximize the benefit to you as an owner?
Is your staff spending too much time administering the current 401(k) plan, wouldn’t it make sense to empower your employees to make the changes themselves instead of paying your staff to oversee every change within the plan?
When is the last time your employees were educated on what their retirement plan can do for them?
Cornerstone has recently contracted with a firm to help provide the back office administration and support for our retirement plan business. We are now able to offer a very inexpensive yet robust retirement plan solution for your company. Some of the benefits include:
- Annual education and enrollment meetings
- 24/7 Online access as well as telephone access to your accounts
- Quarterly reports that are easy to understand
- Daily valuation
- Customized plan design to maximize the benefit of your plan
- Cornerstone can serve as the trustee of the plan to reduce the owners liability
- Open architecture - Ability to choose from a robust universe of investment options, we are not affiliated with or restricted to any mutual fund family
- We can administer Employee Stock Option Plans (ESOP)
- We can offer a self-directed option for those employees who would like to manage their own account which includes buying individual stocks
If you are interested in understanding how your current plan is set up, we would be glad to provide you with an analysis of the strengths and weaknesses of your plan. We can also provide you with an alternative option for comparison purposes. Please contact Chad Halbur at 1-866-200-6528 or via email at firstname.lastname@example.org if you are interested in discussing how your retirement plan can reach its greatest potential.