401: Raise Your Retirement Plan to the Next Plateau
Understand your organization’s 401(k) plan fees and take steps to prevent any employee dissatisfaction resulting from the new 401(k) Fee Disclosure Rules.
New 2012 disclosure laws force 401(k) vendors to reveal their fees and services. Rules require that plan participants are informed of the cost per thousand for each of the investment products in their accounts. Since the average account balance for people age 50 and older is more than $200,000, human resources professionals need to be prepared for employees' reactions when they learn they are being charged $3,000 per year, potentially a third of their annual $10,000 contribution. And take note: human resources professionals who offer 401(k) plans to employees are considered fiduciaries under the law and can be held personally liable in their role as a deemed fiduciary.
Steve Butler is the founder and president of Pension Dynamics Corporation in the San Francisco Bay Area -- a retirement plan consulting and administration company in business since 1980. He is the author of two books on 401(k) plans and for the past ten years has written a weekly column on retirement planning for the Bay Area News Group newspapers. Butler is the originator of the "Butler Index," which is an index of total costs of 401(k) plans -- an index featured in articles in the New York Times, the Wall Street Journal, and Money magazine. Butler has testified at retirement plan cost-related hearings conducted by the Department of Labor and before the US House of Representatives Committee on Education and Labor. Steve Butler is a graduate of Harvard and attended UC Berkeley Graduate School of Business Administration.
