REAP1: Why Benchmarking Your 401k Plan Matters SO Much
Josh & Jay welcome Tim Hakes, President of Prime Capital Investment Advisors and Chris Roper, Plan Success Consultant with Qualified Plan Advisors to the Deep Fried studios to kick off Chapter 1 of our Retirement Planning and Education (REAP) Series, a 4 part series discussing important topics that business owners should know about their employee retirement plan offerings. In this episode, the guys discuss how important it is to regularly “benchmark” a qualified retirement plan, such as a 401(k), and best practices for getting quality results from your benchmarking efforts. From fee compression to increased litigation to more educated plan participants, the days of “set it and forget it” are over. Take a listen to what you as a business owner need to know about your 401(k) plan!
> The generally held legal interpretation is that a plan sponsor / business owner need to to benchmark their retirement plan every 3 years to stay compliant.
> One of the reasons you benchmark is to make sure you are paying appropriate fees in your 401(k) plan. It’s recommended to have a 3rd party conduct the benchmarking to avoid any conflicts if the record keeper themselves benchmark the plan.
> There are quality companies that provide benchmarking services for a fee. One way you can reduce costs is to have your plan blindly competitively bid, that is, take the plan to market without any identifying company information and see what offers are out there for your plan. You may be surprised how competitive the market is for your plan. Maybe you don’t want to move the plan – you can use the benchmarking results to negotiate with your current plan provider!
> Benchmarking does not take a lot of time – you can gather the needed information in a matter of minutes – and the time to review the results with a professional is just a few hours, time well spent if it saves you and your plan participant money and increases the competitiveness of your plan.
If any of these topics apply to your situation, we can help! Reach out to us at 251-327-2124, or email [email protected]