Copyright © 2014 Joe Maas

If your company wants to create a 401(k) retirement plan or to move from one 401(k) plan provider to the next, here are some tips on how to shop for the right provider:

Vendor experience: How long have they been in business? What types of clients do they normally work with? Do they have clients with plans similar to yours? In other words, will they be able to handle the administration of your plan?

Service: Consider their overall service, including consistent and timely reporting and investment success. Do they have representatives available 24/7 or online access to serve plan participants?

Education: How do they educate plan participants – software training, seminars, printed materials, online training, etc.? How thorough is the training? This is a critical piece of the 401(k) plan puzzle, especially since some of your employees may be enrolling in a 401(k) plan for the first time. Participation will increase if your employees are well informed.

Recording keeping and administration: Who will handle this? Does the plan provider do it in-house or are these functions outsourced? A qualified 401(k) plan provider will use the latest technology to handling record keeping and 401(k) plan administration in a timely and accurate manner.

Plan compliance: Although your vendor won’t act as your lawyer, your plan provider will be able to assist you with 401(k) laws and regulations, and they should fully support and comply with Employee Retirement Income Security Act (ERISA).

Plan pricing: 401(k) plans involve a lot of different fees, so pricing the plan and the plan provider’s services is important. Consider these fees: set-up fees for creation of the plan; administrative fees for handling record keeping, compliance testing, loan processing, withdrawals, etc.; investment management fees; communication fees or fees for training plan participants; etc.

In addition to the costs themselves, you will want to know how the fees are charged and who pays for the fees – the plan sponsor (i.e., the employer) or the plan participant (i.e., the employee) – and if those fees are one-time fees like set-up fees or recurring charges. Every penny counts, so be sure you understand what your 401(k) plan provider will charge and when. Investment options: What investment options will be available to you if you select a certain provider? Are you restricted to certain investments or portfolios of funds?

Yes, there are a lot of moving parts to a 401(k) plan, including the selection of a plan provider who meets your needs, but don’t get discouraged. If you’re unsure who to use or where to begin, consider starting with a registered investment advisor who can help you sort through the details to choose a plan provider that’s right for your company.

Shopping for a 401(k) plan provider can be challenging, but Joe Maas and the 401(k) team at Synergetic Finance in Seattle can help. Visit Synergy online to learn more or to schedule a complimentary consultation or 401(k) plan comparison.

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Copyright © 2014 Joe Maas If your company wants to create a 401(k) retirement plan or to move from one 401(k) plan provider to the next, here are some tips on how to shop for the right provider: Vendor experience: How long have they been in business? What types of...