Retirement plan decisions made easy
Cutting a 401k Match: How to Soften the Pain
Many companies--23 percent--have either stopped their 401k match, or are considering it. Jeff Brown of the New York Times has an article with suggestions for small businesses considering stopping their match. Here are some highlights for business leaders:
- If cuts must be done, make sure that management shares in the cuts. [ Several of my bank clients have cut management compensation much more than rank and file compensation, which really builds employee loyalty. WBC]
- Look for opportunities to reduce fees paid by 401k participants. Many of the fees are hidden, but certainly can be reduced.
- Take this opportunity to re-set your default options to be more investor friendly. Good defaults include participation rather than non-participation, and investment in a life cycle fund rather than a money market fund.
- "The CFO-Schwab study found much employee hunger for financial education...." [Give us at abcInvesting.com a call about providing investment education to your employees.]
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