The 3 Most Common Mistakes Employers Make When Offering Employees a 401(K)Nov 10, 2023
In the world of employee benefits, a 401(k) plan can be a powerful tool for attracting and retaining responsible employees. However, many employers unknowingly make mistakes that can lead to financial pitfalls, and even legal troubles. In this blog post, we'll explore the three most common errors employers make in managing their 401(k) plans and explain how The NetWellth Strategy is a all-inclusive solution designed to help employers navigate these challenges and foster a financially secure future for both their employees and the company.
- Plan Fees:
One prevalent mistake employers make is neglecting to understand, monitor, and control 401(k) plan fees. These fees can quietly eat away at employees' retirement savings and expose employers to legal risks. The NetWellth Strategy addresses this by simplifying the process for employers through a Best Price Guarantee and a fee transparent tech platform, making it easy to be fee-smart. It provides a simplified approach to understanding and managing otherwise complex Plan fees.
Conventional 401(k) service providers usually provide fee comparisons, however, most advisors are not Plan Fiduciaries and are not required to put Client’s interests ahead of their own compensation, often having a biased towards more expensive Plans and investment options.
Since fees are ultimately the employers responsibility, The NetWellth Strategy makes it easy for employers/employees to benchmark their fees. www.401kfeechallenge.com is also a great resource to see if your Plan is being overcharged.
- Ignoring Employee Education:
Another common misstep is the lack of effective employee education. Employees who don't grasp the intricacies of their 401(k) plans may choose not to participate and make decisions that negatively impact their financial stability.
The NetWellth Strategy takes a user-friendly approach to education, offering regular onsite meetings to help employees understand the importance of their contributions. With over 90% voluntary employee participation, this strategy ensures that employees are actively engaged in securing their financial future and overall well-being.
- Failing Fiduciary Oversight:
Inconsistent fiduciary oversight is a significant risk for employers. Failing to fulfill fiduciary duties can result in legal consequences. The NetWellth Strategy simplifies the process of maintaining proper oversight by providing regular opportunities for employees to interact with retirement plan experts and enrollers. These onsite meetings not only keep employees informed but also keep employers compliant, creating a forum for addressing concerns and questions.
Consequences of Inaction:
The consequences of these mistakes can be severe. Without proper attention to fees, education, and oversight, employers risk dissatisfaction among employees, lower participation rates (higher than needed turnover rates), and potential legal issues or Plan disqualification.
Moreover, a 401(k) plan cannot effectively attract and retain employees who are not actively participating. The NetWellth Strategy not only mitigates these risks but also includes a funded employer match (through additional tax incentives), enhancing the overall attractiveness of the 401(k) plan as an employee benefit.
Navigating the complexities of 401(k) management requires a proactive and straightforward approach. The NetWellth Strategy serves as a packaged solution to the most common mistakes employers make, offering tech-driven fee transparency, high employee participation, and proper Plan oversight. By adopting this strategy, employers not only reduce potential liabilities but also enhance their ability to attract and retain top-tier talent, creating a win-win scenario for both employers and employees. Secure your company's future by embracing the NetWellth Strategy today.
Are you ready to elevate your employee retention stats with The NetWellth Strategy? Let's connect and explore how our transformative approach can help you keep your top talent.
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