When employees receive their initial statement detailing the 401(k) fees they’re paying, you’re likely to get slammed with questions from those employees wondering what it all means.
So what you do right now to prepare for those questions and concerns is crucial.
To that end, Liz Rowell of Benz Communications, an employee benefits communication provider, offers a nice breakdown of the new 401(k) fee disclosure regs, why understanding the fees is so important and what employers can do to prepare. You can view the entire article here.
Here are two best practices when it comes to communicating your firm’s 401(k) fees with employees:
1. Put it in perspective. At first glance, the fees workers are paying may seem a bit jarring to them. So make it a point to tell them the whole story. Remind them about all of the features and tools their retirement plan includes — tax deferrals, company matching and all of the education tools your plan includes (financial education sessions, online tools, etc.).
2. Use the tools at your disposal. If your plan offers online features, it’s a good idea to show employees how the 401(k) fees correspond with a typical plan’s investment returns. Even better, getting reps from your 401(k) plan to explain this relationship to your staff.