401k plan investment fees are easier to accept when there is full disclosure. When participants understand the 401k plan investment fees there is better employee engagement. At the conclusion of a Fiduciary Education Session held at Rice University, Houston, TX, Mr. Fred Barstein, Founder and CEO of The Plan Sponsor University (TPSU), visited with Tina, a Benefits Administrator responsible for approximately 300 employees headquartered in the greater Houston area. They discussed the benefits of Tina’s firm recently switching to a service provider who is a proponent of disclosing all 401k plan investment fees. View this video to learn how the fee disclosure can promote employee engagement.
Full Transcript Here
Fred Barson:
Hi, this is Fred Barson with 401k TV at Rice University in Houston. I am here with Tina, who just attended our program. Welcome, Tina.
Tina:
Thank you.
Fred Barson:
Before we start, Tina, tell us a little bit about yourself and your organization.
Tina:
Hi, my name is Tina. I work with a company that’s about close to 300 people large. We have just recently changed HR TPA providers, and-
Fred Barson:
Right, and what’s your role in the company?
Tina:
I am the Benefits Administrator.
Fred Barson:
Right, so one of the things you mentioned was about, again, you changed your provider. What happened as a result of that?
Tina:
It was a little easier for our employees to see the fees that were associated with the 401k elections that they were making, and that generated a lot of conversation which was a good thing but I think that because of the disclosures that were out there, I think that they had a lot more questions and they were talking among themselves.
Fred Barson:
Right, they thought the 401k was free, and now they realize-
Tina:
That’s correct.
Fred Barson:
It’s not. Right.
Tina:
That’s right.
Fred Barson:
It’s not a bad thing, right?
Tina:
No, no I think it provides a lot of better understanding about how the system worked.
Fred Barson:
Also even with that, now you had more engagement.
Tina:
That’s true, I did.
Fred Barson:
Any engagement, even if “What is this fee? What am I paying for?” they can see that.
Tina:
Yeah, that’s right.
Fred Barson:
So you felt good about that.
Tina:
I did. I think it’s important that the employees understand how the system works, where the money is going, and to start getting a little bit more educated about their investments and making the right choices.
Fred Barson:
It was easier for you to see the fees that they were paying as well, right?
Tina:
Yes.
Fred Barson:
That was good. Final question for you, just a couple of things or something that you picked up that you want to try to implement when you go back after the program?
Tina:
A lot of the people here were talking about some of the education classes that they had-
Fred Barson:
For their employees?
Tina:
For their employees that they had, that they had presented. I think I’m going to go ahead and try to do the same things for ours. There’s a few that seem very interesting.
Fred Barson:
There’s a lot of resources out there to do that, whether it’s your advisor, provider or third parties as well.
Tina:
That’s right.
Fred Barson:
Very good. Well thanks for your time.
Tina:
Thank you.
Fred Barson:
Thanks for attending TPSU. Thank you for watching 401k TV.
