Skip navigation

Confused About 401(k) Plan Fees?

Posted by Inc. Nov 19, 2012

You're not the only one. A new study reveals that a majority of small business owners do not understand the costs of 401(k) retirement plans.


by Kathleen Kim


The bulk of small business owners have trouble evaluating the fees tied to 401(k) retirement plans, reveals a new study.


A majority of the 500 owners surveyed by ShareBuilder 401k, which sells online retirement plans to small businesses, said they were confused about the costs of their 401(k)plans. Eighty-three percent had questions about all the associated fees they and their employees pay for them.


Additionally, 45% of owners deemed 4% a reasonable 401(k) plan fee rate, a Reuters article states. But according to a 2011 study by Deloitte Consulting and Investment Company Institute, the average fees paid by small businesses with less than $1 million in assets ranges from just .99% to 1.83%.


In an effort to help workers fully grasp their 401(k) plan fees, a ruling by the U.S. Department of Labor now requires employers to provide documentation of the fees their employees are charged.


But ShareBuilder 401k's study notes that while 92% of small business owners claimed to be aware of the new rules, only 60% recalled receiving those explanatory documents. Sixty-eight percent admitted they were not prepared to answer questions from employees about the plans.


"Our survey results suggest many small business owners are still in the dark when it comes to their 401(k) plans and costs, demonstrating our industry has more work to do in disclosing fees transparently and in ways that are easy to understand," said ShareBuilder 401k's president Stuart Robertson.

Article provided by © Inc.

CustomerEruption_Body.jpgby Erin McDermott.

Kristen Carney has felt the wrath of an angry customer. It took up a full page, was single-spaced, and “a little bit of a rant.”


The customer had signed up for the free beta version of Cubit Planning, an online demographic-data tool from Carney’s business, which she co-founded in Austin, Texas. The site had been upfront that the tool would turn into a paid service once it left beta—a detail that apparently went unnoticed by this client once that shift came. But she still wanted to keep this customer.


“We were targeting a very niche audience,” Carney says. “There weren’t many folks that we were going after. So to have one of our exact customers—someone who we wanted to be a long-term customer—be unhappy with us about the switch to a paid tool, we had to show him that we would go out of our way to keep him happy.”


CustomerEruption_PQ.jpgSo Carney not only apologized, she even sent cookies as a peace offering, along with a letter that said she understood his frustration and an offer of a way to move forward. It was a gesture that resonated with the customer, who has continued to mention it even now, three years later, whenever they work on projects together.


“We got such a great reaction from him from that batch of cookies,” Carney says.


It’s a perennial issue for anyone in business: How to deal with a customer who’s upset. Whether in person, on the phone, or even online, these situations can be volatile. So, how can you ensure that you and your employees who deal with customers know how to react properly when a client explodes?


For a small business owner, getting this right is critical, says Susan Steinbrecher, a management consultant, executive coach in the Dallas/Fort Worth area, and author of Heart-Centered Leadership. The reason: Everyone on your staff is watching you for cues on what the appropriate response should be.


With less staff around, “everyone is watching how you handle the customer,” Steinbrecher notes. “Did you cuss them out? Did you call that person a loser, or ‘Can you believe that jerk?’ If you do that, it’s over. You’ve just given them full permission to treat everybody that way. Leaders don’t know half their impact. They are on stage at all times.”


So where to start for your small business?


The first step is listening, giving the customer undivided attention and hearing out their issue, showing empathy for the pain they experienced—even if you might disagree with them. Do not interrupt them, emphasize that you are there to help, and that you understand their frustration. Steinbrecher frames the situation in psychological terms.


“Every individual has two primary needs,” she explains. “One is ego and its personal needs. The other is the practical need. The ego is the need to feel valued, appreciated, cared about, listened to, empathized with, and involved. The practical side is ‘What do I need to get a problem solved.’”


In customer-service situations, early problems arise when the person representing the company cuts too quickly to practical matters and overlooks the importance of soothing a bruised ego, or what Steinbrecher calls “ignoring one side of the equation.” 


“When you try to get right to the point, ignoring all those ego needs, it creates all kinds of havoc,” she says.


From there, simply ask what would make the situation right. Again, by putting the customer in the “driver’s seat,” they feel in control and will often ask for less than what you would have offered.


For her clients, Steinbrecher has devised the “HELP” method, an easy-to-remember acronym that outlines the steps she says are necessary to follow when you’re faced with an unhappy customer. For staffers, it should be displayed prominently to encourage everyone to follow it:

H-Hear the customer out

E-Empathize and apologize in that order

L-Lead the customer to a resolution

P-Provide a responsible course of action

Of course, there is that small minority of customers for whom no answer will ever suffice, or whose ultimate aim is, yes, to get something for nothing. These disgruntled, vocal few are often the reason that businesses have to create these procedures in the first place.


And that’s its own delicate balance: how to know when to let go of that difficult customer. “While the vast majority of people are very reasonable, there are certain customers that, no matter what you do, you’ll never make them happy,” says Bruce Specter, a business development consultant based in the Reno/Lake Tahoe area. “Sometimes you have to be comfortable with firing customers.”


As a possible solution to having a system to handle these complaints, Specter points to software that businesses of all sizes are now using for this task. Once implemented, these systems can deliver information about the behavior of certain customers—for example, individuals who exacerbate complaints to justify asking for unwarranted upgrades or unreasonable discounts or freebies.


“Looking at the data, you might say ‘Man, this guy’s come back a few times, and he always wants something for free,’” Specter says. “At that point, that’s a bad customer and you’ve got to be able to just let them go, from that perspective.”


To illustrate his point, Specter cites an example from business author Patrick Lencioni’s recent book, The Advantage: Why Organizational Health Trumps Everything Else In Business, In one of its anecdotes, the book recounts a letter Southwest Airlines’ CEO Herb Kelleher received from an angry frequent flier. The customer was demanding that he fire a flight attendant who had joked about the possibility of a water landing during the safety demonstration, adding that she’d stop using the carrier, known for its culture of fun, if she wasn’t satisfied. Kelleher’s succinct response to the disgruntled consumer: “We’ll miss you.”


But aside from an occasional bump in the road, there’s hope with the majority of customers.


“Yes, there are going to be those outliers,” Steinbrecher says. “But most people, if you have heard them out, if you have empathized appropriately and apologized, and sincerely offered to make things right, they’ll come down enough and be more reasonable, even if they didn’t start out reasonable.”

Health-Care-Accounts.jpgHealth care is a bottom-line issue for employers. Traditional health benefits programs often entail a one-size-fits-all approach and fail to engage employees in their own health care decisions and, most important for plan sponsors, the cost impact of their decisions. Yet HSAs are putting the power in employees’ hands as they realize that they may get to keep more money in their pockets, enjoy potential tax benefits, and save for medical costs in retirement as well.

For more information, click here to read our White Paper titled "Health Savings Accounts: A bright spot in the health care cost challenge".

WelcomeHome_Body.jpgby Jen Hickey.


Since 9/11, the U.S. has deployed the largest number of active duty and reservists since the Vietnam War. Of the more than 2.3 million deployed (with over 760,000 National Guard and Reserve), about half have left the military (with about 640,000 Guard and Reservists deactivated). And over the next few years, it’s expected that even more soldiers, sailors, marines, and airmen will be returning to or seeking civilian jobs. For small businesses, filling the boots of those citizen soldiers during sometimes multiple deployments of a year or more has had its costs. But keeping the lines of communication open before, during, and after deployment can help ease their transition back into the workplace. There are also legal and logistical factors a small business must consider if temporary help has been brought in during those deployments.


When Frank Strong, a career reservist, got orders to deploy to Iraq in October 2005, he was one-third of the marketing team at Tysons Corner, Virginia based Managed Objects, a $30-million software company of 100 people at the time. “As soon as you get notification of deployment, you’re obligated to let your employer know,” explains Strong. “so they can make the necessary adjustments.”  Before he left, Strong’s co-workers had a party for him and bought him an iPod. While his employer brought in help during his deployment, his position was open when he returned, as is required by law.


According to the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), employers are obligated to reinstate uniformed services employees who have been deployed to the same position or one that is commensurate in responsibility and pay, as well as continue health benefits for up to 24 months. And depending on the length of deployment, returning uniformed services employees may be entitled to leave time before having to return to their civilian jobs. Returning service members are also entitled to any promotions and/or salary increases that may have occurred during their absence, as well as reinstatement of health benefits if they chose to use military health plan during deployment.


Including training leading up to his deployment, Strong was gone for about a year and a half, returning in the spring of 2007. But he kept in touch with his employer, exchanging emails with his boss at least monthly. “He’d keep me updated on what’s going on with the company,” recalls Strong. When he returned, Strong met with his boss and visited the office to let everyone know he’d be returning. “It’s important to show your face and let your employer know you’ll bet back,” notes Strong. “But employers should also encourage their employees to take the full time they’re allotted after their service, because you need that time to visit family and friends, arrange housing and get your life in order.” Upon his return from Iraq, Strong took the full 90 days he was entitled to before returning to work.


Louie Keen has employed several active-duty military, Reservists, National Guard, and veterans, as well as their spouses, at his three small businesses in St. Robert, Missouri, home to Fort Leonard Wood, the U.S. Army’s Maneuver Support Center, which trains up to 90,000 military and civilians each year. “When I hire someone, their family becomes part of the organization,” explains Keen. “Our soldiers are protecting our country, we try to do that for their families while they’re gone.” Keen keeps in contact with spouses and invites the families to company events and holiday parties. “It gives soldiers peace of mind knowing their families are being treated the same way while they’re away.”


WelcomeHome_PQ.jpgFor employees in key jobs gone for long and multiple deployments, Keen offers them comparable positions at the same pay until they get themselves acclimated. “For positions that require a lot of training like bartending, they’ll work the back of the bar for a while and then I’ll give them some bartending shifts once they’re back up to speed,” says Keen.


Social media and the Internet have also made it easier for Keen’s deployed employees and customers to stay connected. “Many friendships develop at our businesses,” notes Keen. “Connecting through our Facebook page gives them a sense of home while they’re away.” Keen also stays in contact with his deployed employees’ unit commanders or senior non-commissioned officers (NCOs), who can assist with sending care packages to deployed soldiers and help with transition after deployment. 


By the time he was deployed again in April 2011 as part of a multinational peacekeeping force sent to Egypt, Strong had moved onto Beltsville, Maryland-based Vocus, a cloud marketing software provider. It was much easier to stay in touch with his employer this time around, as Internet access was more readily available. “The technology was far better than in Iraq,” recalls Strong. “I was able to stay up to date real time through Twitter and the company’s web site and spoke to my boss about once a month.”  Like at his previous employer, Strong was placed on an unpaid leave of absence during his deployment, However, Vocus also offered to make up the pay differential between his higher civilian salary and lower military pay and continued to match Strong’s 401(k) contributions, though the company was not legally obligated to do so. Strong recommended his employer for an award through Employer Support of Guard and Reserve (ESGR), a Department of Defense agency created in 1972 to improve cooperation and understanding between National Guard and Reservists and their civilian employers.


For those small businesses that can’t afford to extend benefits or pay, they can still sign a statement of support for their Guard and Reserve member employees through ESGR, which also offers USERRA training in conjunction with the Department of Labor (DOL) and compliance assistance for employers.


“The military has gotten a lot better at taking care of soldiers once they come home since the early days or Iraq,” says Strong. Still, adjusting back to civilian life can be difficult, particularly for service members who have been deployed to combat zones. “If I see someone flipping that switch a little too quickly, I make sure they get some counseling,” notes Keen. “But the military has trained them to be that way in combat, so it takes some time to undo that.” In the 11 years since the start of the War on Terror, Keen has only had to let go two employees in 2004/2005 after their deployment for behavioral issues. “The transition usually takes a few months,” says Keen. “But the difference between 2006 versus 2012 is enormous with regard to how the military is helping to re-integrate the soldiers after their tours.”


To help with the transition, Strong recommends entrepreneurs open up the communication lines as the pace of adaptation at small businesses is often quick. “Have a conversation about expectations, metrics and goals, if the job description has changed or new responsibilities have been added,” Strong advises. Also, it might help to become familiar with resources like Military One Source, and the Center for Deployment Psychology’s free online training course in “military cultural competence,” which will also help increase employer sensitivity to some of the issues that their part-time military employees face during and after deployment.


Life after the military for new veterans

The Costa Mesa, California nonprofit Working Wardrobes, recently received a federal grant to launch its VetNet program, which offers veterans a much broader array of career development services and industry training and offers education to employers on how to recruit, train, and retain qualified veterans. “Having served veterans among our general population for the past seven years, we discovered that much more needed to be done to address issues unique to their situation,” explains Jerri Rosen, founder and CEO of Working Wardrobes. “Particularly in that transitional period after leaving the military.”


“Many veterans are very young, having enlisted just after high school, and don’t plan to return to jobs they had before they entered the military,” points out VetNet case manager Dr. Roberta Cone. “One of the things we focus on is translating skills and discipline they acquired in their military training and tour of duty to a civilian skill set.” The staff of VetNet all have military backgrounds and training and sensitivity to the unique challenges veterans face. “We have a lot of tools to help make that transition easier for the veteran and the potential employer,” explains Rosen. “It’s not just about finding a job, but retraining to be part of civilian and workplace culture.”


While small businesses need to be aware of their legal responsibilities, those costs are far outweighed by the value of retaining uniformed service employees. Employers can seek additional support by partnering with local nonprofits and state agencies that work with veterans. “One of the benefits of hiring a reservist is you get someone that’s very motivated and wants to do more than just the minimum,” notes Strong. “They’ve attached themselves to selfless service and duty of country. And that’s a trait you see replicated in their day-to-day work ethic.” But educating yourself and employees about the issues deployed service members face doesn’t cost a thing and can help ease their transition back to the workplace.

by Jeff Haden


The more questions you ask, the more you learn about a job candidate, right? Wrong. Here's a better strategy.


Eventually, almost every interview turns into a question-and-answer session. You ask a question. The candidate answers as you check a mental tick-box (good answer? bad answer?).


You quickly go to the next question and the next question and the next question, because you only have so much time and there's a lot of ground to cover because you want to evaluate the candidate thoroughly. The more questions you ask, the more you will learn about the candidate.


Or not.


Sometimes, instead of asking questions, the best interviewing technique is to listen slowly.

In Change-Friendly Leadership, management coach Rodger Dean Duncan describes how he learned about listening slowly from PBS NewsHour anchor Jim Lehrer:


Duncan: He urged me to ask a good question, listen attentively to the answer, and then count silently to five before asking another question. At first that suggestion seemed silly. I argued that five seconds would seem like an eternity to wait after someone responds to a question. Then it occurred to me: Of course it would seem like an eternity, because our natural tendency is to fill a void with sound, usually that of our own voice.


Lehrer: If you resist the temptation to respond too quickly to the answer, you'll discover something almost magical. The other person will either expand on what he's already said or he'll go in a different direction. Either way, he's expanding his response, and you get a clear view into his head and heart.


Duncan: Giving other people sufficient psychological breathing room seemed to work wonders. When I bridled my natural impatience to get on with it, they seemed more willing to disclose, explore, and even be a bit vulnerable. When I treated the interview more as a conversation with a purpose than as a sterile interrogation, the tone of the exchange softened. It was now just two people talking...



Listening slowly can turn a Q&A session into more of a conversation. Try listening slowly in your next interviews. (Not after every question, of course: Pausing for five seconds after a strictly factual answer will leave you both feeling really awkward.)


Just pick a few questions that give candidates room for self-analysis or introspection, and after the initial answer, pause. They'll fill the space: with an additional example, a more detailed explanation, a completely different perspective on the question.


Once you give candidates a silent hole to fill, they'll fill it, often in unexpected and surprising ways. A shy candidate may fill the silence by sharing positive information she wouldn't have otherwise shared. A candidate who came prepared with "perfect" answers to typical interview questions may fill the silence with not-so-positive information he never intended to disclose.


And all candidates will open up and speak more freely when they realize you're not just asking questions--you're listening.

Article provided by © Inc.

Filter Article

By tag: