401(k) Plans & Employee Benefits

Roy Alame
2 min readMar 3, 2022

401(k) plans are a popular choice for many employers wishing to provide retirement benefits to their workers. Unfortunately, many of these companies experience low participation rates due to employee contributions not being matched by the employer. To boost participation rates, Roy Alame recommends employers work with an experienced retirement planning advisor to give one-on-one instruction to employees. Four key priorities for better managing 401(k) plans include:

· Providing participant education

· Improving participation rates by raising contribution levels

· Focusing on fiduciary responsibilities

· Managing administrative tasks

Clear communication between employers and employees is critical in shaping the direction of 401(k) plan participation. Promoting the plans and their benefits can help invest employees in the process, allowing them to gain a better understanding of this valuable retirement benefit.

Fidelity bonds are a requirement for 401(k) plans. This form of business insurance is designed to provide financial protection against fraudulent actions committed by employees. In essence, a fidelity bond protects the assets held in the 401(k) plan from both physical and monetary losses. There are three primary types of this business insurance coverage:

· ERISA Bonds — a minimum amount of 10% of total plan assets according to the Employee Retirement Income Security Act (ERISA), up to a maximum of $500,000 for the bond.

· Business Service Bonds — a fidelity bond that covers employee theft of client property when employees are required to enter the premises of customers.

· Dishonesty Bonds — the most traditional form of fidelity bond which often includes both blanket and scheduled coverages. Blanket coverage is the best option for larger companies with many employees, while scheduled coverage is idea for smaller businesses with less risk exposure.

A financial services firm with experience in retirement benefits plan management can help employers select the right fidelity bonds for their needs and potential risk exposures.

Finally, employers must be aware of a significant pitfall when establishing 401(k) plans. If your business participates in a 401(k), that plan may own a proprietary fund, which is a mutual fund owned and managed by the plan’s record keeper. Proprietary funds charge fees for asset management, and these fees represent an uncontrolled overhead expense. Another drawback to proprietary funds is that they rarely outperform similar funds in the same class, making them a poor choice for companies that want to have great retirement plans for their workers. Roy Alame recommends that employers carefully scrutinize their plans or leverage the experience of a trusted retirement plan management firm like Gate Key Capital to avoid these expensive and underperforming funds.

Roy Alame is the President and Executive Private Wealth Advisor for Gate Key Financial in Raleigh, North Carolina. One of his firm’s many roles is to help businesses establish and manage employee benefits packages. These benefits have been shown to attract and retain top talent at some of the most prominent companies in North America. Benefits plan management can be a complex task; by offering customized services to its clients, Roy and the team at Gate Key Financial allow business owners to focus on what they do best: grow their companies.

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Roy Alame

Roy (Rawad) Alame,financial manager and founder of Gate Key Financial and 123Triangle.org from Raleigh,North Carolina. visit my website@https://www.royalame.com