Seven Attributes of a Great 401(k) Plan
By Stuart Robertson
Down the Road
Whether you're shopping for your company's first 401(k) plan or if you just want to see how yours stacks up, these seven attributes are important benchmarks to help you determine if it's a great 401(k). Chances are, if you have a 401(k) plan, you don't have one of these. While still more rare than they ought to be, just know they do exist and can be easily found with a quick online search.
So let's count them down:
- Offers low, transparent pricing that automatically lowers business and participants costs as the plan monies grows - no contracts or contribution minimums required
- Is easy for the company to setup (something you could do over lunch), and the plan is supported on-going to manage payroll and year-end requirements, etc.
- Minimizes business risks for your company by sharing in the duties of managing the plan in your employees' best interests
- Keeps all-in participant fees less than one percent (inclusive of fund expenses, recordkeeping, custodial services), so more of your money stays invested
- Takes a long-term, diversified, and preferably an indexing approach for your fund line-up
- Has a governing Investment Committee that manages your investment roster and model portfolios
- Provides all the employee guidance tools, training and support to answer employee questions quickly and help them reach their goals
How does your plan measure up?