The IRS announced that employees will be able to contribute an extra $1,000 to their 401(k) accounts in 2022. The change reflects higher cost-of-living adjustments to retirement accounts but does not affect IRA accounts.
Inflation means you probably should contribute more to your workplace retirement account in 2022.
Runnymede has increasingly been serving as a fiduciary advisor to companies' 401(k) plans so I continue my series of articles on how to tune up your retirement plan. The intended audience is the company and its trustees that sponsor the plan but participants are also advocating for better plans. It is our hope to help employers optimize and better manage their retirement plan. In doing so, we seek to help employees achieve their goal of successfully preparing themselves for retirement.
This week, I want to help you to decipher mutual fund share classes. By far the largest component of 401(k) plan fees and expenses are those associated with managing plan investments. Moving to less expensive funds is an action item that can save money fast and have a huge impact over time.
Runnymede has increasingly been serving as a fiduciary advisor to companies' 401(k) plans so I will be writing a series of articles on how to tune up your retirement plan. The intended audience is the company and its trustees that sponsor the plan but participants are also advocating for better plans. It is our hope to help employers optimize and better manage their retirement plan. In doing so, we seek to help employees achieve their goal of successfully preparing themselves for retirement.
Editor's note: There is a more up-to-date version of this article at 401k Providers: 2017 Top 10 Lists. Thanks!
Plan sponsors, that is companies that offer their employees a 401(k) plan, have many choices when selecting service providers for their defined contribution plans. The challenge for many businesses, especially for small businesses, is that the day-to-day running of their businesses leaves little time to review, monitor, and optimize their retirement plan. The result is that many plan sponsors lack a comprehensive understanding of who the top 401k providers are. PLANSPONSOR magazine conducts an annual recordkeeping survey profiling top providers. Here's their list of the 2016 top 401(k) providers and a few of my thoughts.
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.
Editor's note: There is a more up-to-date version of this article at 401k Providers: 2017 Top 10 Lists. Thanks!
The good news is that plan sponsors have many choices when selecting a recordkeeper for their defined contribution plans. The challenge for many businesses, especially for small businesses, is that day-to-day running of their businesses leaves little time to review, monitor, and optimize their DC plan. The result is that many plan sponsors lack a comprehensive understanding of who the top 401k providers are. PLANSPONSOR magazine conducts an annual recordkeeping survey profiling top providers. Here is their list of the 2015 top 401k providers and a few of my thoughts.