Increased retirement plan charges? 4 ways to cope
Due to rising provider management fees and expenses, more small businesses are thinking of dropping retirement benefits — a move that disastrous consequences.
Eliminating retirement benefits can kill morale and give on-the-fence employees yet another reason to jump ship. Here are four ways to hold off rising retirement plan costs now:
- Revisit and compare. The first step is to determine exactly how much your firm is paying (administrative fees, management fees, etc.), as well as how the plan has performed. Next, do a side-by-side comparison with the competition.
Reason: It’s true that most retirement plans have struggled over the last year, but certain plans have had much more positive results than others. Enlisting the help of a benefits consultant or an outside advisor can also be very helpful here. - Renegotiate, renegotiate, renegotiate. The market has hurt everyone — including retirement plan providers. The last thing they need is to lose valuable customers, so many will be open to renegotiating your current rates.
Key: For better deals, come to the renegotiation process armed with bids from the competition. - Check out small business-friendly providers. Certain retirement plan providers base fees on factors such as service offerings and the number of plan participants — regardless of what assets are in the plan.
For small firms, especially those with lots of assets, this type of fee structure can be extremely beneficial. - Bundle services. Does your provider have any major price hikes in the works? If so, it may be worth it to try brokering a deal with one of your other service providers.
For example, a NY-based company was hit with a $3,000 charge to reinstate its 401(k). Instead of giving in, the firm opted to change providers. It went with the company that handled its payroll, which offered a discount. The company ended up saving $500 a year.
Free Training & Resources
Further Reading
The Treasury Department and Internal Revenue Service (IRS) released proposed regulations for the new 1% excise tax on remittance transfers ...
IRS announced new per diem rates for business travel, effective October 1, 2024. Employers can use these rates through September 30, 2025. ...
It’s time for updates: Higher federal per diem rates for business travel have been released by the General Services Administration (G...
So is the long-predicted recession near — or here already? Depends on who you ask. The traditional bellwether of a recession, gros...
A California carwash has agreed to a $1.2M settlement to resolve wage theft allegations, according to the California Labor Commissioner’s...
After more than a year, the IRS has made changes to Form 1099-MISC, Miscellaneous Information, and Form 1099-NEC, Nonemployee Compensation....