The Frugal Fiduciary Blog

401k Disclosure Rules Are Out of Date; It’s Time for Common Sense Reform

Posted by Eric Droblyen on Jun 1, 2016

It probably won’t surprise you to learn that government 401k regulations are often inefficient or ineffective. That’s too bad because superfluous regulation generally increases the cost of a 401k plan, which in turn, lowers participant returns.

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Topics: 401k fee disclosure, Fee Disclosure, 401(k)

A Common Sense 401k Reform - Retirement Labels and Receipts

Posted by Eric Droblyen on Jul 15, 2015

According to a National Association of Retirement Plan Participants (NARPP) survey of 4,368 active retirement plan participants, 58% said they didn’t know if they’re paying account fees. Of the participants who know they pay fees, only one in four (26%) could accurately calculate fees. In other words, fewer than 11% could correctly identify and calculate the fees being paid from their accounts.

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Topics: 401k fee disclosure, 401k fees

“Bundling” 401k services with other corporate services can result in fiduciary liability

Posted by Eric Droblyen on May 6, 2015

I am a sucker for a deal.  As such, I’m an easy target for companies that offer “bundled” products and/or services.  I mean, lower prices on items I would otherwise buy a la carte - yes, please! For example, when I buy fast food, I always order a “value meal” that includes a burger, fries and a drink – instead of buying these items individually – to save money. When I shop for cable television service, I purchase a bundle that includes the channels I want and Internet.

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Topics: 401k fee disclosure, 401k fees

Online 401k fee analyzers are a marketing gimmick; fiduciaries and participants should avoid them

Posted by Eric Droblyen on Apr 8, 2015

Last year, we wrote an article about a growing number of websites that claim to use technology to help sponsors or participants understand or uncover 401k fees. At the time, we were not fans of any of these sites. We wrote “To fill the gaps in the two DOL fee regulations, private company websites have begun to spring up to meet the underserved needs of sponsors and participants. I try to stay current with these new offerings. So far, no one has managed to pull the sword from the stone. Efforts range from potentially helpful in providing some basic information to downright misleading. All have significant shortcomings that anyone using the sites should be aware before making any decisions based on the information reported.”

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Topics: 401k fee disclosure, 401k fees

Beware of Surrender Charges and Other Extraordinary 401k Fees Charged by Insurance Companies

Posted by Eric Droblyen on Mar 25, 2015

If your retirement plan’s service provider is an insurance company, there is a good chance your investment options are variable annuities and not mutual funds.  If this is the case, it’s important to understand how variable annuities are different than mutual funds – it can be easy to confuse the two.  Not understanding the differences between mutual funds and variable annuities can result in excessive 401k fees for participants and fiduciary liability for sponsors – especially when a decision is made to move the plan to a different provider.

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Topics: 401k fee disclosure, 401k fees

New companies are trying to fill the gaps in 401k fee disclosure regulations. Here’s why they all fall short.

Posted by Greg Carpenter on Aug 15, 2014

Plan re-enrollment
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Topics: small business retirement plans, 401k fee disclosure, 401(k) Investments, 401k blog, 401k Help Center, 401k fees, small business 401k, 401(k), Form 5500, DOL

Life After the 401k Fee Disclosure Rule

Posted by Greg Carpenter on Jul 23, 2013

Image courtesy of Stuart Miles at FreeDigitalPhotos.net
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Topics: 401k fee disclosure, 401k blog, 401k fees, fee transparency, Fee Disclosure, 401(k)

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