401k/Trustee Directed Plans – Excerpt from 02.21.10
Bryan and Jim continue discussion about 401k plans and the high fees associated with choice vs. the lower fees of trustee directed plans. For most plans under $6 Million Dollars, the costs of 401k plans can be rather prohibitive, ranging in the 2.5% to 3.5% category when all costs are figured in. In many cases companies are wanting to create a ‘benefit’ for their workers but by selecting an insurance company such as Principal, Lincoln or Mass. Mutual they actually create a liability due to the added insurance cost in the plan. Other 401k plans with multiple mutual funds do no better in lowering the cost. In fact, have many ‘hidden fee’s’ as can be learned about in the articles following. A trustee directed plan allows any company sponsor the ability to cut ‘costs in half’ while providing better investment options for the workers as a whole. More information about trustee directed plans and lower cost 401k plans can be found by calling Blue Ocean Portfolios at 636-530-9393.
401k Report: Key Pages 39 & 40 PDF
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Very useful post, I have bookmarked and I will be back… Anyway I can link to your post?
The framework of a 401k retirement plan is fairly simple. Every month, workforce can elect to contain a certain part of their revenue deposited into one of these plans, and the quantity placed is usually matched because of the employee’s engaging with company.
Thanks I think. Now sure I know what your comment is or what. You are right but we are discussing a Trustee Directed Plan where everyone has the same plan design (strategy) from the bottle washer to the company president thus creating the most favorable outcome by limiting expenses and eliminating the gambling side of investing by people switching back and forth. The idea of a trustee directed 401k plan is to utilize the good side of pensions (low cost, professional management) with the good side of 401k plans (cheaper for companies and flexibility for workers if they quit) to create a success retirement plan.