With the volatility of the current market and all of the 401(k) options available, it can be difficult to discern whether you’ve chosen the right retirement plan provider. In fact, recently, I’ve had several employers reach out about whether they should switch providers to retain and attract the best employees. 1
In case you’ve found yourself in the same boat, here are a few telltale signs it’s time to consider a different retirement plan provider:
TOO MANY FEES
Even seemingly small fees can eat into employee returns a lot down the line. In fact, just a 1% difference in fees could reduce the amount your employees have saved for retirement by more than 20% 2 in some scenarios. Switching to a larger plan or one with more passive index options can help employees save more for retirement.
SPENDING TOO MUCH TIME ON PLAN ADMIN
If your current plan doesn’t offer services to help you with the fiduciary duty for your plan3, integrate easily with your payroll, or provide top-notch data security 4, changing providers could save your business time–and serious headaches down the road.
LACK OF FLEXIBILITY
Is your retirement plan giving employees the flexibility to choose multiple investment options that fit their individual needs? That’s increasingly important 5 to young workers in particular.
POOR INVESTMENT PERFORMANCE
Market fluctuations happen, but when you’re consistently seeing lower returns than average–or than competitors–consider switching plan providers. 3% to 8%6 is a typical return for a moderately aggressive allocation, but that figure, of course, shifts with higher or lower levels of aggressiveness and risk.
EMPLOYEE PARTICIPATION IS LOW.
Maybe you like your plan just fine, but employees still aren’t enrolling at high rates. Is it a problem with the provider? Some 401(k) providers offer better retirement education and communications than others–key offerings, considering 63% of Americans 7 report confusion about 401(k) plans.
If you’re thinking about switching your company’s retirement plan provider or just want to review your current plan, feel free to reach out by phone or email–I’m here to help
The PensionmarkMeridien Team may be reached at 866-871-9963 or meridienteam@pensionmark.com
https://pensionmarkmeridien.com
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CITATIONS:
1. Benefits Pro July 27, 2021
2. United States Department of Labor, September 2019
3. Employee Fiduciary, February 7, 2018
4. CNBC, March 16,2021
5. 401 K Specialist, February 24, 2021
6. Investopedia, February 17, 2021
7. CNBC, March 7, 2019
Pensionmark® Financial Group, LLC (“Pensionmark”) is an investment adviser registered under the Investment Advisers Act of 1940. Pensionmark® is affiliated through common ownership with Pensionmark Securities, LLC (member SIPC).