|401k Plan sponsors and participants alike will benefit from learning more about the effect of investment related costs over time
SAN JOSE, Calif., April 8, 2014 -- America's Best 401k (www.americasbest401k.com), the leading provider of innovative 401k plan solutions for medium and small sized businesses, today announced the release of their 401k plan fee checker. Available for every existing 401k plan, the free report is designed to allow plan sponsors and plan participants to get a better understanding of the effect of investment related costs over time and to encourage business owners to consider alternatives if appropriate.
"The facts regarding what sponsors and participants alike don't know, and should know, are stunning," said Tom Zgainer, CEO of America's Best 401k. "Over 30% of sponsors with assets under $25 million do not know the average expense ratios of the funds in their plan. Well over 50% of participants think they pay no investment related fees, or that their employer pays them, and over 32% of participants say they don't have the knowledge to understand the effect of fees over time. Our mission is to fix this. The fee checker allows for the beginning of a conversation to see if alternative options should be considered."
The fee checker can be accessed at the America's Best 401k website: www.americasbest401k.com/401k-fee-checker/
By entering in a company name the report will pull plan information from the DOL 5500 database and compare its investment related costs to industry averages. Until later this year when all 2013 5500's have been filed, the report uses 2012 filings. An update plan button does permit modifying both plan assets and participants after the initial report is produced to display current figures.
"The report is designed to create a starting point for a thorough plan specific analysis once we receive additional information," said Zgainer. "We recognize with the greater emphasis on fee disclosure, plan sponsors are actively looking to lower investment related fees. However, there are still many 1000's of plans paying egregious fees without fully understanding the long term results."
An industry survey recently noted plan sponsors thought 3% in investment related fees were acceptable. The fee checker is designed to debunk that sort of acceptance. For example, a plan with $1,000,000 in assets adds $100,000 in new contributions to the plan each year. One plan has 3% in fees, the other .75%. Over 20 years, assuming a 5% return on each, the plan with 3% in expenses will have lost over $1,500,000 in assets due to the higher fees.
"We don't think there is a business owner in the country, presented with that clarity of information, who would not be moved to rapidly improve their plan. It has to be done. For themselves, who often have the highest balances, and for the good of their employees," said Zgainer.
About America's Best 401k
America's Best 401k is a leader in innovative 401k plan solutions for medium and small sized businesses by combining strategic plan design, high touch service, and integrated asset allocation technology with greatly reduced investment related expenses. This approach was developed to increase the likelihood of successful and expected financial outcomes for 401k plan participants at retirement. Led by a team of industry experts that have helped over 3500 companies with their retirement plan, AB401k serves those starting a plan for the first time, plans with over 2,000 employees, companies with plan assets over $100 million, and everything in between. Learn more at www.americasbest401k.com.