The Makes Sense 401k: A breakthrough retirement plan that makes sense for employers and their employees.
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How the Makes Sense 401k benefits your employees.
The Makes Sense 401k directly attacks the high cost of 401k plans. Until now, getting costs under control in a small- or mid-size employer plan was nearly impossible. High-cost mutual funds, high fees to service providers, high administration costs and even back-door payments through so-called "revenue sharing agreements" all are subtracted from plan assets, adding up to a gigantic reduction in the potential retirement nest eggs of participants. Poor selections of mutual funds, inadequate coverage of asset classes, and poor-performing managed-account options all further detract from the chance that the employee can ever reach his or her retirement goals.
Historically, investment choices in 401k plans have been almost exclusively limited to mutual funds. Mutual funds in 401k plans carry many charges and fees that frequently add up to 2.5% or more. Even the least costly mutual funds have costs of 0.5% or more. Many also restrict participant activity, and charge additional penalties if the participant desires to make changes in his or her account that would violate a fund's arbitrary activity limits. Further restricting the ability of participants to fully benefit from their investments, the available investment choices in most 401k plans do not cover most asset classes adequately.
The Makes Sense 401k breaks the mold by offering extremely low-cost Exchange-Traded Funds ("ETFs") covering all major asset classes as its standard investment lineup. These ETFs break through both of the previous barriers to using them in 401k plans - individual trade commissions and the inability to buy or sell fractional shares. Through the MidAtlantic Trust Corporation, the ETFs in the Makes Sense 401k are traded at end-of-day without per-transaction commissions, and are automatically bought and sold in fractional shares. Additionally, there are no arbitrary activity restrictions or penalties.
The ETFs in the Makes Sense 401k are passive Index ETFs, which offer complete coverage of the asset classes they represent without the cost and performance variability of "active managers" - the majority of whom routinely underperform their benchmark indexes anyway.1 The bottom line: Total costs of the ETFs in the Makes Sense 401k are as much as 90% less than the costs of mutual funds found in typical 401k plans.
The importance of this dramatic reduction in fees is surprisingly great: a study reported by NBC News said that an average income family could lose as much as $155,000 to excessive 401k fees.2 The dramatic reduction in fees made possible by the Makes Sense 401k is a major immediate benefit to your plan participants, and removes a very real potential source of future participant unhappiness, complaints or even lawsuits.
The Trustee of the Makes Sense 401k has appointed CMS Advisors, a registered investment advisor since 1987, to perform the selection of the ETFs available to participants in the Makes Sense 401k. Jim Gissy and Bill Sherman, of CMS Advisors, bring with them decades of experience in managing investment accounts. Mr. Sherman is a nationally recognized expert in the analysis of 401k plan investment lineups, and has produced reports on nearly 10,000 retirement plans.
Click here to learn more about the wide variety of Self-Directed and Professionally Managed investment options available in the Makes Sense 401k.
1 Just 36% of of the top 790 Large Cap and Small Cap actively-managed funds beat their benchmarks in 2012, and only 41% during the preceding 7 years of 2005-2011 (source: FactSet/Goldman Sachs, January 2013)
2 "Your family is probably losing $155K from 401(k) plan, and why new rules won't help", NBC News, (1/25/2013)
The Makes Sense 401k: A breakthrough retirement plan that makes sense for employers and their employees.
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Call us toll-free at: 1-877-843-4015 (1-877-THE-401k).