As another year begins, there is a lot on business owners' minds. How do I keep my best employees? How do I reduce business expenses? Now is a great time to assess portions of your business. Is there a better, cheaper, way to do something? Is there a way to make your team's life easier?
Often my team finds that for companies who haven’t reviewed their 401(k) recently, we’re able to accomplish those things. Reduce costs, increase services, and make life easier for your HR team and better for your employees.
1. Automate Your Payroll
Most 401(k) mistakes are a result of improperly adjusting or processing payroll. They can cause friction if an employee feels a mistake hurt them. Automating payroll significantly reduces the chances of an error.
Moreover, payroll integration makes many action items in the 401(k) easier for your payroll or HR team. Ideally, you would set up what's called a 360 integration with your payroll provider. This automates changes to payroll and the 401(k) recordkeeper so your team can focus on other items.
Moreover, payroll integration makes many action items in the 401(k) easier for your payroll or HR team. Ideally, you would set up what's called a 360 integration with your payroll provider. This automates changes to payroll and the 401(k) recordkeeper so your team can focus on other items.
2. Clarify and Benchmark Fees
In order to know whether your 401(k) is working for your team, owners need a clear idea of how much they are paying their 401(k) service providers.
Get the basics clarified. What are you paying your record keeper? Your advisor? Your administrator? Are you getting good value compared to the market for those dollars? Plancorp offers a no obligation fee benchmarking report.
Get the basics clarified. What are you paying your record keeper? Your advisor? Your administrator? Are you getting good value compared to the market for those dollars? Plancorp offers a no obligation fee benchmarking report.
3. Get Your Advisor to Help Tell the Story of Your Retirement Plan
Employers and employees might have a great working relationship, but sometimes employees need to hear financial news from a less familiar source. "We have a great 401(k)!" may be true, but it may be taken with a grain of salt by some employees when it comes from the boss’s mouth.
Having a third party, such as your advisor, talk to employees about the great benefits of your 401(k) can be more helpful. For example, an advisor could mention during an education session that your fees are very low relative to the market. This kind of third-party confirmation will add value and confidence that employers might not be able to provide.
Having a third party, such as your advisor, talk to employees about the great benefits of your 401(k) can be more helpful. For example, an advisor could mention during an education session that your fees are very low relative to the market. This kind of third-party confirmation will add value and confidence that employers might not be able to provide.
4. Find a Level of Understanding with Employees
Employers often get frustrated when they don't feel like employees appreciate the work owners put into their 401(k) or that they pay the fees for the plan.
I have seen countless times how excited employees get when their 401(k) improves or fees go down. And I have seen how frustrated employees are when they learn their fees are increasing or their match is going down. (Owners are often surprised at how poorly these meetings go, even when I warn them beforehand.)
I have seen countless times how excited employees get when their 401(k) improves or fees go down. And I have seen how frustrated employees are when they learn their fees are increasing or their match is going down. (Owners are often surprised at how poorly these meetings go, even when I warn them beforehand.)
So employees may not be saying it out loud, but they do appreciate the work you have put into their benefits. If there is an opportunity to improve your plan, they may not thank you directly, but they will be excited.
Do you want to review your plan and see if there is an opportunity to improve it? Set up a call with me here.
