A Workplace Twist on Balance Transfer Day

In case you missed it, two Sunday’s ago was designated as Balance Transfer Day, based on a Facebook-led protest against big banks that encouraged consumers to switch their high interest credit cards for cards with lower rates or 0% teaser rates.  The December 11th protest was meant  to “beat the banks at their own game and demand the same 0% interest rate that they receive from the federal government,” the protest’s organizers said.  Hopefully, this put the spotlight on the high cost of finance charges that some consumers are facing with their credit card debt.  So where can you shine your own spotlight?

Many of your employees could have money sitting in qualified retirement plans from previous employers, which might include 401(k) accounts, 403b accounts, or maybe even a 457 plan.  Is your workforce aware they can transfer these prior employer’s plans to your current retirement plan?  Get the word out by sponsoring your own Balance Transfer Day, making it all about the advantages of rolling over old accounts into your Plan.  Why bother to spotlight the rollover option?  Well, some of your workers could be getting hit with an inactive fee for no longer being an active employee at their prior job.  My husband had that happen to his 401(k) account from his previous employer when the company switched to a different insurance company as their new plan provider.  The insurance company sent a disclosure stating that they would begin to assess a $10 quarterly fee for inactive accounts, so we rolled the funds to his current retirement account.  Or, perhaps the previous employer’s plan has mutual funds with high expense ratios or below average performance. 

Mid- January would be a perfect time of year to host Balance Transfer Day for rolling over retirement accounts, since the end of year account statements will be arriving by email or postal mail.  Here’s my list of the top 5 reasons that a rollover can benefit your workforce:

  • Consolidating multiple qualified plans into one makes it easier for the employee to keep track of their balance and manage their investment portfolio.
  • Your Plan may have lower fees and expenses than the employee’s previous employer’s Plan.
  • Accumulating more assets in your Plan may help with negotiating lower fees for all participants.
  • Funds that are rolled over now can be available for a plan loan for the employee.
  • Employees retiring at age 55 or older would now have access to the rollover funds in the current plan without incurring the pre 59 ½ early withdrawal penalty of 10%.

Share your comments below, or email me at [email protected] if you can add to my list of advantages for rolling over those old retirement accounts to the current employer-sponsored retirement plan. 

In conjunction with this idea of Balance Transfer Day, check with your plan provider for a flyer or brochure on transferring assets, and you could also host a retirement planning workshop or even offer one on one financial counseling sessions to help your employees make the right decisions for their retirement.

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