Boost Retirement Savings and Reduce Taxes by Paying Your 401(k) Fees from a Business Account
Fees As a small business owner, you have a significant personal stake in how your 401(k) plan administration fees are managed. The method you use for paying plan expenses can have a major effect on participant returns. Paying them from a business account – not plan assets – can directly benefit you, your employees, and your business. Here’s what you need to know to decide whether the approach is right for you. Understanding 401(k) Administration Fees All 401(k) providers charge fees for delivering plan administration services such as participant recordkeeping, ERISA compliance, asset custody, and investment advice. These fees can be paid from one of more of the following sources: Direct Fees 401(k) providers deduct these fees directly from participant accounts. Their amount must be disclosed in invoices in 408b-2 and 404a-5 fee disclosures, participant statements, and invoices. Direct fees can be charged on a flat and/or asset-basis. Flat fees increase with parti...