fees

Plan Sponsors: How to Review Plan Costs to Avoid Lawsuit

If you're a plan trustee, I hope you're paying attention. Employees have been increasingly active fighting against “excessive fees.” Just in the 4th quarter of last year alone, there were eleven major class-action lawsuits filed in federal courts against 401(k) sponsors or providers of retirement products. Most suits allege that participants’ retirement savings were compromised because employers, as plan fiduciaries, failed to act in participants’ best interests and breached their duties under the Employee Retirement Income Security Act (ERISA) by allowing high fees, poor fund choices, and conflicts of interest.

If you are among those who thought only multibillion-dollar plans (Cigna, Edison International, ABB, International Paper, Boeing, Lockheed Martin) were at risk because small- and mid-sized plans won't get sued, think again. A new class-action lawsuit was filed in the Minnesota federal court targeting excessive 401(k) fees in a $9.2 million plan with 114 active participants. Damberg v. LaMettry’s Collision Inc., claims that plan fiduciaries breached their duties under ERISA for allowing excessive fees to be charged for plan investments, record keeping, and administration.

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401k Fees: An Employee Checklist

18-years ago, I worked for a company whose 401k offering had high fees, poor investment choices, and poor service. Employees felt powerless with exception to trying to ask good questions at the meeting once a year when the 401k provider came in. Unfortunately, our questions were never well answered and our employer did not hear our desire for improvements to the plan. The good news is that those days are fading quickly and employees are increasingly empowered.

Employees Advocating For Fiduciary Duty

Defined contribution plans like 401k's transferred a lot of responsibility for managing one's retirement investments from the employer to the employee. In an effort to best achieve retirement goals, it makes sense for employees to also be involved in fighting back against high 401k fees and for better investment options. After all, you've got to fight for your own self-interests.

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Just say No to front end load mutual funds

When we started the Runnymede blog a couple of years ago, our number one priority was to educate investors about investments and finance. Since then, we have received hundreds of questions. We take pride in answering each and every one of them.

Last week, I reviewed a woman's investment portfolio who asked, “Are my fees huge for the investments that I have?” After a bit of quick research, I was shocked by the results. In fact, it nearly made me sick to my stomach. Her retirement accounts held five mutual funds and all of them had outrageous front-end load fees. Here is the shocking truth:

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Avoid Four Common Portfolio Mistakes That Could Hurt You

401(k)

In my 15 years as an investment adviser, I have reviewed many portfolios. Typically, these situations arise when engaging with a new client or reviewing a current client's funds outside of my advisement, e.g. 401(k). Sometimes, a prospective client asks me to perform a portfolio review like a patient seeks out a second opinion. Whatever the occasion, I enjoy the opportunity to look at another adviser's work which often provides insight into his/her investment philosophy, background, and approach. We work with a diverse clientele with widely varying investment needs and objectives. Whether the portfolio belongs to an individual, non-profit organization, or captive insurance company, there are recurring themes that I find and would handle differently. Here are four common portfolio mistakes that you should avoid.

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New Year’s Resolution: 3 Easy Tips to Be Financially Fit in 2014

New Year's Resolution

“Ring out the old, ring in the new,

Ring, happy bells, across the snow:

The year is going, let him go;

Ring out the false, ring in the true.”

― Alfred Tennyson

It's that time of year to make a promise to yourself to start doing something good or stop doing something bad on the first day of the year. Nearly 50% of Americans regularly make New Year’s Resolutions; and according to the Fidelity 2014 New Year Financial Resolutions Study, an all-time high 54% of Americans say they are considering resolutions regarding their finances. Here are three simple tips to help keep you financially fit in 2014.

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