Tips on choosing your first 401(k)
for your first 401(k) plan need not be intimidating. When putting
your company's plan out for bid, the Department of Labor's Pension
and Welfare Benefits Administration has these tips:
- Provide all prospective service providers
with complete and identical information about the plan and what
you are looking for so that you can make a meaningful comparison.
This information includes the number of plan participants and
plan assets as of a specified date.
- Consider the specific services you would
like provided. Think about, for example, what information you
want sent to you and to the employees; the frequency of those
reports; whether you want educational materials and meetings for
participants; how often participants can change their investment
choices; which services are musts and which are optional, and
extra features such as loans, Internet trading and telephone transfers.
- Make informed decisions in selecting and
monitoring your plan's service providers and investments.
- Fees are just one of several factors you
need to consider in your decision-making.
- All services have costs. Compare all services
to be provided with the total cost for each prospective provider.
- Consider obtaining estimates from more than
one service provider before making your decision.
- Cheaper is not necessarily better.
Ask each prospective provider to be specific
about which services are covered for the estimated fees and which
are not. To help in gathering this information and in making equivalent
comparisons, you may want to use the same format for each prospective
provider. The PWBA offers a standard form on its Web site in PDF,
-- Posted: Feb. 25, 2000