Wednesday, September 1, 2010

York, SC –"How would you feel if you suddenly discovered your bank was deducting hidden fees from your accounts and not telling you?" That's the dilemma millions of employers with 401(k)s will find themselves in next July according to Jeff Harris, an Independent Pension Consultant in York, SC. An explosive new pension regulation will reveal the "true" costs of supposedly "free" 401(k)'s, creating a host of potential legal and PR nightmares for clueless employers. The Employee's Retirement Income Security Act (ERISA) section 408 (b)(2) permits plan assets to be used to pay service provider fees, so long as the compensation is "Reasonable".

Trouble is, most employers have no clue as to their plans true costs because the vendors seldom disclose all the fees; but that's about to end! Employers have until next July 16th to comply with the new disclosure rules. The 401(k) industry thrives on hidden fees called "revenue sharing." In essence these legal "kick backs" are paid to the salesmen and their firms by the investment companies they recommend. The fees are quietly deducted from employees' accounts and divvied up among the various players.

Over a 40 year career hidden fees could lop off a third or more of an employee's retirement nest egg according to independent analysts. "This new rule is a long overdue godsend for employees," said Harris "But when workers discover the truth this could turn in to an expensive nightmare for their employers." he added. Harris uses a simple three step process to help employers' comply with the new rule. The process enables employers to optimize their existing 401(k) plan without having to go through the red tape and hassle of changing providers.

Ironically, Harris believes employers who take proactive steps now can turn a potential disaster into a positive PR coup. "Employers have a brief window of opportunity to show their employees they're really looking out for their best interests." Harris said. "The ones who do it right should enjoy significant advantages over their competitors who don't." he added. York, SC.