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Survey: Small-business owners uncertain about new 401(k) fee notices
New U.S. Department of Labor required 401(k) fee disclosures haven’t given small-business owners a shot of confidence about explaining their retirement-plan offerings, according to a new survey. The rules, which the Department of Labor’s Employee Benefits Security Administration put into effect this summer, require plan administrators to provide participants and beneficiaries with plan-related information like […]
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New U.S. Department of Labor required 401(k) fee disclosures haven’t given small-business owners a shot of confidence about explaining their retirement-plan offerings, according to a new survey.
The rules, which the Department of Labor’s Employee Benefits Security Administration put into effect this summer, require plan administrators to provide participants and beneficiaries with plan-related information like administrative expenses and individual expenses. But most small-business owners who reviewed mandated fee-disclosure documents from 401(k) providers reported feeling confused, according to findings of a survey released Sept. 12 by a Seattle–based investing firm, ShareBuilder 401k.
A full 83 percent of small-business owners walked away from disclosure documents with questions about what their company should do, the survey found. And 68 percent did not feel fully prepared to answer employee questions about their plans.
“Part of the issue is it’s new,” says Stuart Robertson, president of ShareBuilder 401k, which is a subsidiary of McLean, Va.–based Capital One Financial Corp.’s ING Direct business. “The second is that they may not fully understand their company’s fee-disclosure document. We’ve seen them range from 8 pages to over 30 pages.”
Small businesses — defined in the ShareBuilder 401k survey as having 100 or fewer employees — often don’t have as many resources to dedicate to looking at retirement plans, Robertson points out. Without dedicated human-resources staffers like those found at larger companies, small-business owners are often left trying to examine 401(k) costs themselves, he says.
Yet the average time owners spent reviewing fee-disclosure documents was just 16 minutes, the survey said. Some business owners, 37 percent, indicated they had hired or planned to hire consultants to help them understand their 401(k) options. Another 34 percent had gathered or planned to collect benchmarking data to help them compare alternate retirement plans in which their company could enroll.
“There is no benchmarking data on [a required fee-disclosure document],” Robertson says. “I’m paying X percent. Is that a lot or a little? We want the employer to realize you can go to a cost comparison or talk to your current provider about what options are available to lower fees.”
Fees are normally based on a percentage of a plan’s assets. However, small-business owners don’t know what 401(k) fees are fair, according to the survey.
The average small-business owner who participated in the ShareBuilder 401k survey pegged 4 percent as a fair rate. That’s higher than the rate ShareBuilder 401k recommends, Robertson says. The company tries to keep employee fees at 1 percent or lower.
“While a few percent may not seem like a lot, over a career, it adds up to be hundreds of thousands of dollars in someone’s nest egg,” Robertson says.
Even so, few small-business owners seemed concerned with shopping for lower fees, the survey said. Only 33 percent reported using the new disclosure documents as a jumping-off point for negotiating about their plan with their current 401(k) provider. A mere 26 percent said they used the disclosures as a flashpoint sparking shopping for a new provider.
Nearly all small-business owners, 92 percent, were aware of the new fee-disclosure rules, the survey said. A lower portion, 60 percent, recalled actually receiving the documents, though.
Fees are an important aspect of a 401(k) plan for business owners to review, as are other features, Robertson says.
“They’re going to look at fund performance, they’re going to look at services,” he says. “It’s a good action for doing what’s best for them and their employees.”
The market-research firm Wakefield Research, which has offices in Washington, D.C. and New York City, conducted the national survey for ShareBuilder 401k. It polled 500 small-business owners online between Aug. 17 and Aug. 27. Survey results have a margin of error of plus or minus 4.4 percentage points.
Contact Seltzer at rseltzer@cnybj.com
Rising astronomer launches New Moon Telescopes
WEST MONROE — Celestial inspiration led Ryan Goodson to look into telescopes, and 10 years later he’s viewing them as a chance to run a business in a field he loves. “It started a little over a decade ago,” Goodson says. “I saw a fireball shoot across the sky when I was on my way
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WEST MONROE — Celestial inspiration led Ryan Goodson to look into telescopes, and 10 years later he’s viewing them as a chance to run a business in a field he loves.
“It started a little over a decade ago,” Goodson says. “I saw a fireball shoot across the sky when I was on my way to play golf one morning. I had no idea what it was.”
After some research, Goodson realized the fireball was a meteorite. But that research sparked a curiosity in astronomy, an interest that eventually compelled him to build his own telescope.
He assembled that telescope, which had a five-inch reflector, about six years ago. And he’s been building the instruments ever since, honing the craft to the point where he felt comfortable launching a business around it.
Goodson started New Moon Telescopes along with his wife, Heather, in June. He assembles the telescopes, while she handles the company’s underpinnings like its finances, taxes, and website. The Goodsons run the business from their home at 260 Tanner Drive in West Monroe, in Oswego County.
Ryan Goodson assembles the telescopes in a 1,100-square-foot workshop. It’s an ideal space for putting together the instruments, which can be quite tall, he says. For example, a telescope with a 12-inch reflector stands five-and-a-half feet tall, while one with a 30-inch reflector measures nearly 12 feet when assembled.
“You have to be able to have tall ceilings to test your very, very large telescopes,” Ryan Goodson says. “On our website, the smallest I have is a 12-inch reflector, and we have the capacity to go all the way up to 30 inches.”
New Moon Telescopes focuses on telescopes geared toward amateur astronomers, but the firm also wants to sell to universities and professionals, he says.
Aside from using the company’s website for marketing, Ryan Goodson plans to generate interest in his telescopes at “star parties.” Star parties are gatherings of amateur astronomers that draw people from multiple states.
“For a few days you basically throw a party for amateur astronomy that involves looking at the stars,” Goodson says. “They’ll come and bring telescopes. You have vendors set up.”
Eventually he would like to purchase land in Oswego County to host his own star parties twice a year. He’s not at that point yet, however.
The Goodsons want New Moon Telescopes to generate $18,000 in revenue by the end of this year. They would like to grow that to more than $100,000 next year, which would be their company’s first full year of operation.
New Moon’s telescopes are designed to be portable so that astronomers can move them. They feature a truss assembly that detaches and closes like an accordion — an improvement over standard trusses, which consist of several separate aluminum poles that can be difficult to assemble in the dark, according to Ryan Goodson.
Additionally, New Moon’s telescopes have some unique woodwork, he says. Goodson does not use screws to fasten together his instruments’ mirror boxes and rocker boxes, which he says is a typical construction method for telescope makers.
“We do all box joints,” he says. “The overall result has a mechanical advantage, and it’s prettier.”
New Moon’s telescope work can cost from $2,000 to more than $10,000, Ryan Goodson says. He can put together a “rebuilt” scope with a new enclosure around optics from a customer-supplied, mass-market telescope for about $2,000. But instruments featuring New Moon-supplied optics are more expensive.
Ryan Goodson does not make New Moon’s optics, although he says he has made his own for personal telescopes in the past. Instead, he purchases the optics, usually from Lightholder Optics, a California firm.
“The optic is about 50 percent of the cost on my end,” he says. “Buying that mirror, getting it here, and putting it safely in the telescope is a large part of the process. It’s very complex, and if you know the measurements involved in telescope making, there’s not much tolerance for error. If you have a 32nd or 64th of an inch error in your scope, you’re going to get bad views.”
Ryan Goodson is a board member of the Syracuse Astronomical Society. In addition to his business, he works in manufacturing at M.S. Kennedy Corp. in Clay.
Goodson was previously a manager for Raymour & Flanigan Furniture in Yorkville, and he’s moved around the country managing different furniture stores. He was in Kansas when he saw the meteorite a decade ago.
Binghamton Thrifty Shopper reaches new sales high
SYRACUSE — The Binghamton location of the Rescue Mission’s Thrifty Shopper chain has hit $1 million in sales for the first time in its history.
Smile-Therapy wants to beam emails to colleges, businesses
CAMILLUS — Have grouchy employees in the morning? A small firm in Camillus wants to help everyone grin so you don’t have to bear it. Smile-Therapy sends out an email at 8 a.m. every morning that’s designed to help people start their days on a positive note. The company started signing up individuals for its
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CAMILLUS — Have grouchy employees in the morning? A small firm in Camillus wants to help everyone grin so you don’t have to bear it.
Smile-Therapy sends out an email at 8 a.m. every morning that’s designed to help people start their days on a positive note. The company started signing up individuals for its service in April 2008 and has now added focuses on businesses and colleges to help it grow its subscription base.
“If you’re not happy where you’re at, absenteeism goes up, turnover is huge,” says Tim Smith, founder and owner of Smile-Therapy. “Customer service suffers, and that rolls into productivity and profitability.”
For businesses, Smith believes his daily emails improve employees’ moods and inspire them to be more productive over time. Each email is built to be read in 30 seconds to a minute so that they do not take up too much time, he says.
Every day’s email follows a different theme. Monday is a giggler, or a joke. Tuesday is a shot of encouragement. Wednesdays and Thursdays bring motivational or inspirational stories. And Friday emails are based on fun — they can contain anything from a brain teaser to a money-saving tip.
Smile-Therapy also sends out an extra email on Saturday. It’s called the “Smooth Jazz Café” email and features a link to a single song.
Smith writes the emails, drawing information and ideas from his own research. For example, books he reads often contain quotes that make it into his emails, he says.
Some companies can’t or don’t want to pay for another employee benefit, Smith says. So, he suggests they pay for Smile-Therapy through their existing tuition-reimbursement training programs. As professional development, he contends his emails are better at reinforcing good working habits than going to a seminar once or twice a year.
“The reason this is so good is the frequency of it,” he says. “A little bit every day. Drip, drip, drip, drip.”
Smith started pitching Smile-Therapy to colleges about two-and-a-half years ago. He’s had some success, signing up workers at companies such as Cam’s Pizzeria and the Times Union in Albany.
Six months ago he decided to start trying to attract college students and employees at colleges. Those efforts, which are still just beginning, evolved out of conversations he had with parents who said their children weren’t getting any positive information from social-media sites like Facebook and Twitter, Smith says.
Smile-Therapy isn’t pursuing college students solely through their parents, however. The company is looking to strike a deal with a college that will have it send its daily email to all freshmen.
“When you go from high school to college, you don’t know anybody,” Smith says. “The pressure’s on. It’s a pretty stressful time. So I can go to a college and say, ‘If I can do anything to make your first-year student experience more positive, less stressful, isn’t that a good thing?’ ”
Smile-Therapy has hired two part-time employees to help Smith reach out to businesses and colleges, bringing its employee total to three, including Smith. It hired the employee focusing on business a year-and-a-half ago and the employee specializing in colleges six months ago.
The company is headquartered in 200 square feet of leased space in suite 3 at 25 Main St. in Camillus. It leases the space from the Camillus–based leasing, management, and development company Olympus, Smith says.
However, Smile-Therapy doesn’t limit its distribution to one geographic area, according to Smith. It has individuals receiving its emails as far away as Australia and Brazil.
Smith declined to share Smile-Therapy’s revenue total, but says he expects to increase revenue by 20 percent to 25 percent in the upcoming year.
The company charges $5 per month per person for its emails.
“We land one big college, it’s going to go nuts,” he says. “We’re in talks with probably 60 companies. We’re going to all the SUNY schools to start off.”
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Today at Smile-Therapy: Important lesson to learn from the intelligent Socrates
(Again thanks to the worthwhile-to-visit site Fropki.com)
In ancient Greece (469 – 399 B.C.), Socrates was widely lauded for his wisdom.
One day the great philosopher came upon an acquaintance who ran up to him excitedly and said, “Socrates, do you know what I just heard about one of your students?”
“Wait a moment,” Socrates replied. “Before you tell me, I’d like you to pass a little test. It’s called the Triple Filter Test.”
“Triple filter?”
“That’s right,” Socrates continued. “Before you talk to me about my student, let’s take a moment to filter what you’re going to say.
“The first filter is Truth. Have you made absolutely sure that what you are about to tell me is true?”
“No,” the man said. “Actually, I just heard about it and …”
“All right,” said Socrates. “So you don’t really know if it’s true or not.
“Now let’s try the second filter, the filter of Goodness. Is what you are about to tell me about my student something good?”
“No, on the contrary …”
“So,” Socrates continued. “You want to tell me something bad about him, even though you’re not certain it’s true?”
The man shrugged, a little embarrassed.
Socrates continued. “You may still pass the test though, because there is a third filter — the filter of Usefulness.
“Is what you want to tell me about my student going to be useful to me?”
“No, not really …”
“Well,” concluded Socrates. “If what you want to tell me is neither true nor good, nor even useful, why tell it to me at all?”
The man was defeated and ashamed.
Might be one to print off for the kids, the refrigerator, or even the next sales meeting.
Governor: NY property tax average stayed within cap last year
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Anaren captures new satellite work
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Galaxy programming VP to retire
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UC accelerated nursing program approved
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Community Memorial Hospital recognized for quality measures
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Pyramid Brokerage changing signs after 45 years
Pyramid Brokerage Co. will phase out the 4,000 yellow sale and lease signs it uses throughout the state over the next 12 to 18 months.
Stay up-to-date on the companies, people and issues that impact businesses in Syracuse, Central New York and beyond.