This is a sponsored post. The Debt Free Guys received compensation for this post. All opinions are our own.
Benjamin Franklin said, “In this world nothing can be said to be certain, except death and taxes.” That was before the invention of investment service fees.
As Certain as Death and Taxes
In the 401(k) world, there are essentially Plan Administration Fees, Investment Fees and Individual Service Fees. Before July 2012, when the Department of Labor created the 401(k) Retirement Plan Fee Disclosure Rule, 401(k) plan sponsors and plan participants rarely knew the total cost of these and other hidden fees. They just knew for certain such fees existed.
Since July 2012, a lot has been said about such fees because high fees make it hard for 401(k) plan participants to achieve their retirement goals. Without the economies of scale of larger 401(k) plan sponsors or businesses, small- and medium-size plan participants suffer from net-fees that total 2% or more.
When an 8% return is considered the high-end of normal and inflation is 1.5%, fees of 2% are prohibitive.
ForUsAll For Employers
Traditionally, the only way to lower fees charged to 401(k) plans was to increase the size of plans. Average fees don’t typically drop to 1% until plans reach $10M. They don’t drop to near 0.50% until they reach $100M. Small- and medium-size businesses with plans held at traditional firms rarely see such low fees.
ForUsAll has rolled out services and solutions for plans under $10M and offers plan sponsors end-to-end solutions that include personalized advice, plan administration support and reduced compliance burdens. The fee of 0.52% charged by traditional firms on $100M plans, extends to ForUsAll plans of any size.
As mentioned previously, economies of scale are the ingredient to lowering fees. ForUsAll’s modern technology platform creates economies of scale that drive down the traditionally high operational costs associated with smaller 401(k) plans. ForUsAll isn’t a robo-solution, though, and provides personalized advice from licensed advisors and dedicated support teams – actual people – to maintain the human touch small- and medium-size plan sponsors crave and often keep at a high cost.
As appealing as ForUsAll’s lower fees are, it’s the relief of plan and compliance management, usually the burden of the plan sponsor or business, that are the real gem of ForUsAll’s products and services for small- and medium-size businesses. While such requirements are a challenge for every business, small- and medium-size businesses find them especially challenging because their businesses are managed with tighter margins.
This plan and compliance management includes 3(38) and 3(16) fiduciary rules, payment deferral management, regulatory Form 5500 filings and other compliance requirements. These are managed by ForUsAll’s payroll integration, automated IRS nondiscrimination testing, and compliance checks and reduce most 401(k) headaches for small- and medium size business owners as plan sponsors.
Pooled with the reduced legal and regulatory risks, lower employer costs and automation of error-prone administrative tasks, such as calculating and processing employee deferrals, ForUsAll is a diamond in the rough for small- and medium-size businesses that want to attract and retain their industry’s best talent.
ForUsAll For Employees
In a highly competitive job market, such as today’s, employers compete to acquire and retain the best talent to acquire and retain the best customers. To attract such employees, small- and medium-size businesses must compete with the compensation packages of large-size businesses that can offer the best in wages and benefits. A key component of such compensation packages is a company sponsored retirement plan.
Today’s gold standard for company sponsored retirement plans is the 401(k). Whether they take advantage of it or not, America’s workers know that a solid company sponsored retirement plan is critical to their long-term financial success. A business that can offer its employees the gold standard with better performance will be the employer of choice for today’s best and brightest.
Because of ForUsAll’s ease of use and state of the art technology, such as automatic 6% deferral for new plan participants, their average participation rate per plan is 89% with an average savings rate for all plans at 7.4%.
The industry average savings rate for plan participant, including those in plans for small-, medium- and large-size businesses, is between 5% and 6% and is lower for younger employees. At 7.4%, ForUsAll’s automated deferral generates 23% to 48% higher contributions to its plans than industry average.
For plan participants or small- and medium size business employees, this is the real gem of ForUsAll’s products and services. Multiple studies each year show that America’s workers are not saving enough for retirement. Any plan that improves the savings rate of its participants is good for the business, its participants and the country.
ForUsAll For Us All
With its advanced technologies and innovative approach, ForUsAll is becoming the gold standard 401(k) plan for small- and medium-size businesses and their employees. ForUsAll knows that helping America’s small- and medium-size business owners and workers save such pennies is the earnings of which Benjamin Franklin, one of our country’s founding fathers, spoke.
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This is a sponsored post. The Debt Free Guys received compensation for this post. Although this post is sponsored, all opinions are our own. The Debt Free Guys believe that 401(k) plans are the best retirement plan for the majority of American workers. We also believe that a successful American economy requires strong small- and medium-sized businesses. Thanks to technology such as ForUsAll’s it’s now easier for small- and medium-sized businesses to offer 401(k) plans to their employees. This is good for everyone.