Sunday, May 17, 2009

“SINORAMA” and your 401(k)

I recently watched (part of) a baseball game in Toronto between the Yanks and Jays. Behind the batter was a sign which changes every inning or so, and for some reason the name caught my eye: “SINORAMA”. I was a little taken back as I tried to think of what sort of organization, place, or product it could be.

Turns out I wasn’t seeing the whole sign, which was for a casino…as in CASINORAMA.

So, what does this have to do with 401(k)‘s? It occurred to me that plan sponsors don’t always get the whole picture, either. I was reminded this week when I came across a Payroll Company 401(k) proposal with very low dollar cost. And no contract charge (it was a plan with less than $1mm). But somehow the 2.17% fund expenses were glossed over.

Plan sponsors at this level are often the owner/president/CFO and more and may not have the expertise to know what they are really getting. Any time there is a recession or worse, there is more opportunity for someone with a sales quota to say or do anything to get the business. If you can spend a few extra minutes and get the WHOLE story, you’ll get the true cost efficiency you’re looking for.