If your company offers a 401(k) retirement savings plan for your
employees, you're already ahead of most small-business owners.
Ninety-two percent of companies with 20 or fewer employees have
no retirement solution, according to Andrew Meadows, consumer and
brand ambassador at The Online 401(k),® which provides
Web-based 401(k) plans to small businesses. This year, new
Department of Labor (DOL) regulations will require 401(k) plan
providers to be more transparent about the fees embedded in
employees' 401(k) plans. These new reports, which will be published
in November, are expected to make employees and employers
reconsider their 401(k) plans. And for those who don't yet have a
plan, it may be the perfect time to consider launching one.
According to the American Association of Retired Persons, 80
percent of people don't realize a portion of their 401(k)
distributions goes toward fees for record keeping, administration,
investment advice, brokerage and management services. Some plans
cost employees thousands of dollars each year, according to David
B. Loeper, a registered investment adviser and author of Stop
the Retirement Rip-off: How to Keep More of Your Money for
Retirement. If your company offers a 401(k) plan, chances are
employees may experience some sticker shock when the new reports
surface this fall.
"Business owners usually are not experts in retirement planning;
they're too busy running their businesses," Loeper says. "Many
small-business owners have been misled into purchasing 401(k) plans
that are unreasonably expensive for themselves and their employees,
and the new reports coming out will make this...
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