Business owners understand the benefits of providing their valued employees with a quality 401(k) benefits plan. Statistics have shown that retirement plan benefits aid in recruiting, retaining and rewarding high quality employees. However, some business owners have come across misinformation which keeps them from offering a retirement plan to their employees or updating their current plan. We’re here to set the record straight.
MYTH #1: My 401(k) Provider is liable if something goes wrong.
The fiduciaries – not the provider – are legally responsible for the plan and keeping everything on track. In some cases, the company’s Human Resources Director, Benefits Manager, Chief FInancial Officer, Controller or Owner take on this responsibility. Third parties can also act as fiduciaries to your plan. At RWA Advisors, our financial professionals work as your fiduciary to reduce your risk, optimize the plan based on your employee make-up, advise you about your investment options, help you make informed decisions and keep the pla in compliance.
Myth #2: If we have a 401(k) plan, we must match contributions. While employee adoption of 401(k)s tends to increase when employers offer contribution matches, there is no mandate which forces the business owner to provide a match. If you’re not interested in offering a match at this time, you can still implement a quality plan and let employees make the contributions without a match.
Myth #3: Retirement plans are basically all the same. There are more quality plan options available today for small to medium-sized business. There are also substantial differences between 401(k) providers and the level of service you receive. Since there is such a variety among providers and their offerings, evaluating your best options with a trusted adviser is a good use of your time. We work with our clients to help them understand their options, what is included and their costs without hidden fees. In fact, many of our new clients gain substantial savings when they update their plan with us.
Myth #4: Our small business can’t afford the fees. There are affordable and flat-fee plans designed specifically for small businesses. Regardless of your company’s number of employees or size of your budget, we are confident we can find quality plan options for you.
Myth #5: We don’t have the staff to manage the plan. Cut down on the time you are required to spend managing your plan by outsourcing the most of the stressful plan management responsibilities to a trusted financial advisor. By taking on some of the fiduciary responsibilities and automating most of the process, RWA Advisors are able to alleviate the most stressful and burdensome tasks for our clients.
Have you encountered a 401(k) myth we haven’t covered or have a question about your own company’s 401(k) plan? We want to hear from you. Email or call us today at 561-288-1111.