How often do retirement plan sponsors check up on 401(k)s?
Some small businesses may not be prepared to benchmark processes and continuously look for and reject unacceptable investments.
Do you have high-quality investment choices in your plan?
While larger plan sponsors may have more “pull” with plan providers, this does not relegate a small company sponsoring a 401(k) to a substandard investment selection. Sooner or later, employees may begin to ask questions. “Why does this 401(k) have only one bond fund?” “Where are the target-date funds?” “I went to Morningstar, and some of these funds have so-so ratings.” Questions and comments like these may seem reasonable and might surface when a plan’s roster of investments is too short.
Are your plan’s investment fees reasonable?
Employees can deduce this without checking up on the Form 5500 you file – there are websites that offer some general information as to what is and what is not acceptable regarding the ideal administrative fees.
Are you using institutional share classes in your 401(k)?
This was the key issue brought to light by the plan participants in Tibble v. Edison International. The Supreme Court noted that while Edison International’s investment committee and third-party advisors had offered a variety of mutual funds, the plans offered higher-priced options and didn’t offer plans that were similar, yet of a lower cost. The court ruled that “a trustee has a continuing duty—separate and apart from the duty to exercise prudence in selecting investments at the outset—to monitor, and remove imprudent, trust investments. So long as a plaintiff’s claim alleging breach of the continuing duty of prudence occurred within six years of suit, the claim is timely.”
Institutional share classes commonly have lower fees than retail share classes. To some observers, the difference in fees may seem trivial – but the impact on retirement savings over time may be significant.1
When was the last time you reviewed your 401(k)-fund selection & share class?
Was it a few years ago? Has it been longer than that? Why not review this today? Call in a financial professional in Charlotte, NC to help you review your plan’s investment offering and investment fees.
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Football is back, which means Summer is coming to a close, days will get shorter, and sweaters will soon be in play. This year, there was no pre-season, so professional football started in September, which coincidentally, is a perennial month for stock market volatility.1
Roth IRA Conversion decisions have attracted retirement savers since their introduction in 1998. They offer the potential for tax-free retirement income, provided Internal Revenue Service rules are followed.
The 2015 Obergefell v. Hodges Supreme Court decision streamlined tax and estate strategizing for married LGBTQ+ couples. If you are filing a joint tax return for this year or thinking about updating estate strategies, here are some important things to remember.
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