With 401k Partners, you have complete discretion over the investments offered within your 401k plan. There's no bundled, pre-set investment mix.
Let's preface this by saying that we're not in the business of selling anything beyond your customized 401k plan and corresponding online plan administration and participation systems. 401k Partners receives no commissions, kickbacks, etc., from any brokers, investment houses or other investment-related agencies.
We strongly recommend that you consult with a qualified professional in choosing your 401k plan investments. Any fees you incur are likely well spent. You might alternatively consider contacting an independent investment consulting service such as FinancialEngines, ClearFuture or mPower that specializes in personal financial advice but is also qualified to offer advice on choosing investments for your 401k plan. To view some information on these independent retirement planning services, please go to the following topic within our ERISA 404c page: Personalized Retirement Planning, 401k Investing Advice Services Available Online for 401k Participants.
With 401k Partners, you have complete discretion over the investments offered within your 401k plan. There's no bundled, pre-set investment mix. We can certainly help you assess which APPROACH to 401k investing — self-directed brokerage accounts, no-load mutual funds, or load mutual funds — might best suit your company's needs, and our input is free. Please read Topic 4, below, about things to keep in mind when choosing your plan's 401k investments, then give us a call or send us an e-mail if you'd like additional input.
The US Labor Department is currently auditing 401k plans of all sizes because of a trend that may violate current pension laws. Many companies, especially smaller businesses, are shifting plan administrative expenses to plan participants, knowingly or unknowingly. This shift of plan expenses come in the form of "hidden fees" that are routinely deducted from each participants' retirement savings by some plan providers and mutual funds. Because of lax reporting requirements, no one really knows how much money changes hands behind the scenes, but it is estimated that excessive fees may be as much as $1.5 billion per year, and growing.
In the 401k arena, expense fee disclosure, whether to plan participants or plan sponsors, has been notoriously confusing and unclear. The impact of these confusing hidden fees on plan participants' retirement accounts can be very significant over time. As example, consider a hypothetical 401k investment such as a mutual fund, with deducted expense fees of 1.3 percent versus one with fees of just .3 percent. Applied to an initial 401k investment of $5,000, with regular annual investments of $5,000 returning 10 percent, and compounded over 15 years, the difference between the "low-fee" investment and the "high-fee" investment adds up to $15,398. That's a significant sum deducted from a participant's retirement savings.
Policymakers and plan sponsors seeking to structure well-managed 401ks for their aging workforces are beginning to acknowledge the negative impact hidden fees has on eroding pension accumulations for retirement. What might appear to be a small difference in deducted investment fees can result in substantial differences in eventual retirement benefits.