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
White Papers
Provided by Anaplan
Webinars
Provided by Yooz
Webinars
Provided by Yooz
Further Reading
Maine’s Paid Family and Medical Leave (PFML) program began paying benefits on May 1, 2026. The state DOL runs the program with Af...
IRS has announced some inflation-adjusted dollar amounts you’ll need if your benefits package includes tax-favored health plans. F...
A new DOL opinion letter addresses off-the-clock work, rounding policies, and the de minimis defense – and the conclusions should prompt ...
Upwards of 10 million workers will see a bump in their paychecks in 2024. Twenty-two states hiked their minimum wage rates to help low-inco...
Federal and state courts hearing overtime pay disputes will always defer to the maxim that the employer must prove employees aren’t s...
The standard for determining who’s a joint employer has changed, due to a final rule from the National Labor Relations Board (NLRB). ...