Your Company’s 401(k) Plan: Go For Best!

When it comes to fringe benefits, you undoubtedly want what’s best for your employees.  That’s a daunting challenge with respect to health care coverage.  Premium increases are never ending and benefit specifics must be carefully weighed against your company’s ability to pay. 

Fortunately, the 401(k) world can be very different and far more rewarding…if you know what to look for and where to look.  If you want a BEST 401(k) for your business and employees, make sure it meets the following minimum standards: 

Broad Investment Options:  Plan providers typically force a company and its employees to choose between 15-25 mutual funds, usually from one or two fund families.  Since any given fund family doesn’t do all things equally well, this approach severely limits a participant’s ability to select top performing investments in all major categories.  A BEST 401(k) will feature top-ranked offerings from a dozen or more no-load mutual fund families. 

Appropriate Investment Options:  For some strange reason, many employers and participants have accepted the idea that investment options should be limited to mutual funds.  Funds are not right for everyone, nor are they suitable for every economic/market environment.  In addition to top-ranked mutual funds, a BEST plan offers the possibility of individual stocks, individual bonds, ETFs, and FDIC-Insured certificates of deposit to name a few. 

Relationship Choices:  Most plans offer one type of relationship:  self-directed by the participant.  If a true “advisory” option is available, it generally comes with a higher price tag.  While some participants are equipped for a self-directed environment, others require much more assistance.  A BEST plan offers self-directed, partnership (advisory), and fully-managed options at no additional cost.   

Local Team Support:  Your retirement plan is one of the two most important fringe benefits available through your company.  You and your employees deserve to be supported by a local team of knowledgeable professionals with a dedicated primary relationship manager assigned to your company.  

Availability of Planning Services:  A BEST plan offers much more than investment support.  That dedicated team mentioned above should include several professionals well versed in important retirement and other financial planning services…and…those should be available to your employees at minimal or no additional charge.  

Take a closer look at your current 401(k) arrangement to make sure that it contains these important elements.  

Go for best!


2 thoughts on “Your Company’s 401(k) Plan: Go For Best!

  1. Hate to disagree, having been an advisor to many qualified plans in the past, I have not seen that allowing participants to trade stocks has been beneficial.

    1. Dave, you raise an excellent point. For some individuals and in the absence of proper guidance and support, this feature could be problematic.

      Fortunately, as this pracice becomes more common, first-rate (BEST) plan providers are increasingly adept at providing the types guidance and education necessary to make this a beneficial plan feature. One key, of course, is to de-emphasize “trading” while encouraging a longer-term view.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s