Online Tool Compares 401(k) Plan Fees

America’s Best 401k, a provider of 401(k) plan solutions for medium and small-sized businesses, has released an online tool that assesses and compares plan fees.

By entering in a company name, the fee checker will pull plan information from the Department of Labor’s Form 5500 database and compare its investment-related costs to industry averages. The checker is currently using information from 2012 filings, but will access more current information later this, when all Form 5500 paperwork for 2013 have been filed.

The free report produced by the tool is designed to allow plan sponsors and plan participants to get a better understanding of the effect of investment-related costs over time and to encourage business owners to consider alternatives if appropriate.

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According to Tom Zgainer, CEO of America’s Best 401k, based in San Jose, California, research shows more than 30% of sponsors with assets less than $25 million do not know the average expense ratios of the funds in their plan. More than 50% of participants think they pay no investment-related fees, or that their employer pays them, and more than 32% of participants say they do not have the knowledge to understand the effect of fees over time.

“The report from the fee checker is designed to create a starting point for a thorough, plan-specific analysis once we receive additional information,” says Zgainer. “We recognize with the greater emphasis on fee disclosure, plan sponsors are actively looking to lower investment-related fees. However, there are still many plans paying egregious fees without fully understanding the long-term results.”

More information about the online fee checker can be found here.

Allianz Offers Video About Retirement Income Risks

Insurance provider Allianz Life has joined others in the retirement industry to support National Retirement Planning Week.

To help people better understand how financial “hits” triggered by health care costs, inflation and taxes can potentially affect their retirement income, Allianz Life launched “Retirement Income Risks,” a three-minute animated video, which can be found here.

The video uses data from the U.S. Consumer Price Index to explain the potential impact of health care costs, inflation and taxes to retirement income, as well as how retirement vehicles like an annuity can help as a potential solution.

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“Retirement planning is about more than setting a savings goal and retirement date. It also needs to include a strategy for dealing with the many expenses that tend to increase as we get older,” says Allianz Life Vice President of Consumer Insights Katie Libbe, based in Minneapolis. “In order to ensure their money lasts as long as they do, people need to develop a strategic retirement plan that includes some form of guaranteed retirement income.”

Libbe cites research from the IRI, which shows a decrease in confidence levels among Baby Boomers about being financially prepared for retirement (see “Workers Need Planning Help Through Retirement”). Over the past four years, only about one-third of Baby Boomers feel confident about being financially prepared for retirement. One reason for this trend, she says, may have to do with Boomers feeling vulnerable to factors such as health care costs, inflation and taxes, which chip away at their savings.

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