Retirement plan providers are seeing a rise in sponsors shopping their defined contribution plans, setting off a 401(k) bidding war as employers get aggressive in their search for lower fees and better options.
As the fourth quarter approaches — the time when most companies make benefits decisions — many are digging into the question of whether they might be paying too much in administrative and recordkeeping fees and would like to see what else is out there.
Of course, as fiduciaries, plan sponsors are under greater pressure than ever to act in the best interest of plan participants when selecting investment options, service providers and monitoring their choices.
Chad Parks, president of The Online 401(k), which specializes in web-based 401(k) plans for small businesses, said a lot of small- to mid-size plans are actively shopping.
Narkoff, echoing a common refrain, recommends plan sponsors work with a financial advisor when making any plan changes.
“I think the employers, small-business owners generally speaking, who are on their own, are not paying the same amount of attention as they are if they are working with an advisor that works in the space,” he said. “We see the financial advisor as being the person helping employers understand the different pricing models available.”