What's the top reason to change your retirement plan provider?

High fees forcing many businesses to rethink their retirement plan providers

Written by Jean Marquit

In the current economy, many businesses are looking for ways to cut costs. Retirement plans seem to be a good target. It’s possible to cut employee match programs, or to switch to providers that offer better pricing. Indeed, paying lower fees is a top reason to change retirement plan providers. Many businesses are less concerned about service and investment issues and more on the bottom line.

Top reasons to change your retirement plan providers

Plan providers often charge fees for their services. This fee can represent a percentage of the assets under management, or a flat fee based on the number of retirement plans your company has. In any case, some providers charge higher fees than others. Many companies pay a portion of these fees and then pass the rest on to the employees using the plan. However, if things become too expensive for company and employee, you might want to look at other options.

It’s possible to shop around for different plan providers as there are a number of brokerages and other firms that offer retirement plans to businesses. Look at a prospectus, and get a feel for the fees charged by the new plan provider. If you can find a provider that offers something approaching what you have now, but for less, it might be enough to make you switch.

When looking for a new plan provider, be sure to carefully review the fine print. Also, make sure that most of the options offered to your employees now will carry over. Switching to a provider with lower fees may mean that you give up some plan advantages, though. Try to change over to something that has the lowest impact on your business and employees. In the present environment, it is often possible to do this, since brokers are having a hard time of it as well; they may be more willing to deal.

In a troubled economy, investment returns (particularly from retirement plans) can take a significant hit. To avoid paying high fees when losses are accumulating, you may want to consider changing retirement plan providers. When you switch, you may find that you can save a great deal of money in the long run, improving your bottom line. And when the economy recovers and retirement plan portfolios improve, that’s even more money for employees once they exit the workforce.

Bottom line: the top reason to change your retirement plan provider is when your current provider doesn’t live up to expectations. Submit a free BuyerZone request for employee retirement plan quotes, and get matched to multiple providers ready to compete for your business.