401k Administrator

How to choose The Right 401k Administrator.

Your best source for a 401k administrator is your financial advisor or your CPA. Once you have a name of a 401k administrator, your first step is to determine if they are qualified to handle your 401k.  The first question you should ask the 401k administrator is, what size 401ks do they handle?   Do they handle mostly small groups with 50 employees or less?  Do they handle mainly medium to large groups with 75 employees or more? This is important because a 401k administrator that serves only larger 401k plans, may not give the proper customer service to a company with 15 employees.

Next, you should look at price.   All 401k administrators charge an annual fee for their services.  Obviously you want someone who is affordable.  However, some 401k administrators also get paid by the financial institutions they work with.  You should ask how much the administrator is getting from a financial institution and whether the 401k administrator will reduce the fees.  

 Most importantly your 401k administrator should be knowledgeable and be able to communicate complex topics easily.  It’s hard to judge how smart someone is, especially if you don’t know that much about 401ks.  Therefore, you should look at some of the things they do.  Do they write articles for a magazine or newspaper?  Are they being interviewed by journalists on TV and/or radio?    If the 401k administrator is consistently being interviewed by journalists, it means that they are knowledgeable in their field and they can communicate their ideas easily.