IN-DEPTH COVERAGE: New rules help investors manage fees
401(k) fees can reduce average nest egg by thousands of dollars
That paycheck deduction for retirement doesn’t entirely go to retirement savings. Most people aren’t aware of the fees for record-keeping, investing and commission of 1 percent to 3 percent, said area financial advisors.
What’s more, most people also aren’t aware of changes coming soon to make more information about fees and services on retirement plans available, experts said.
Service providers of retirement plans will be required beginning July 1 to fully disclose fees on retirement plans to employers that sponsor plans, said David Chrestensen, First Financial Wealth Management relationship advisor. Employers then will be required after Aug. 30 to fully disclose those fees to eligible employees, plan participants and beneficiaries.
The disclosure changes stem from regulations implemented this year by the U.S. Department of Labor.
These new disclosure requirements affect any 401(k) plan where employees are allowed to direct their own investments, Chrestensen said.
Retirement products have become overpriced without buyers knowing what they’re paying, he said.
It’s a case of fee creep, he said.
That money went to environmental assessments, and the group has pledged an additional $1 million more.
Brad White is urban market revitalization leader for Hull & Associates, a redevelopment firm that has offices across Ohio. White and his company work for cities and industrial clients full-time on redeveloping former industrial sites, known as “brownfields.” The company often buys and redevelops brownfields itself. Hull was involved with the University of Dayton’s redevelopment of former NCR Corp. properties, as well as Tech Town business park property.
White said he and his firm’s partners have formed a limited liability company, Home Avenue Redevelopment, to take control of the former Delphi and the former Wright plants south of Third Street and east of Abbey Avenue this summer.
As Hull envisions the work, the firm would acquire the former Wright properties, rid of them of environmental contaminants and then transfer them to the national park.
“We’re acquiring everything,” White said. “So we’re forced by necessity to be interested in all of it.”
Two of the Wright buildings were built in 1910 and 1911. The plants were acquired by General Motors in 1919, and for most of their existence they have been home to auto parts manufacturing, not aviation manufacturing. Delphi closed its nearby Home Avenue plant three years ago.
Hull has worked with the city of Dayton for about a year on a strategy to acquire and develop the Delphi factory properties near and around the Wright factory buildings.
Congress has already legislated that the former Wright buildings will be part of the national park. In 2009, President Obama signed a bill incorporating those buildings and the former Wright mansion in Oakwood, Hawthorn Hill, into the park.
Tony Sculimbrene, executive director of the National Aviation Heritage Alliance — an organization that seeks to preserve and publicize the area’s aviation history — cites national park estimates that developing the buildings for park purposes could cost $28 million to $32 million.
White expects to get the title on the property from DPH Holdings — which holds properties Delphi discarded in its fouryear bankruptcy journey — toward the end of this summer.
“We’ve invested our time and effort to do the work we need to do to get to where we are today,” White said.
Hull and the city have a “memorandum of understanding” Executive director of the National Aviation Heritage Alliance Superintendent of the National Aviation Historic Park on the project, but as of yet, no contract, he said.
Hull will acquire about 54.3 acres, bounded roughly by U.S. 35 on the south, Third Street to the north, west of Abbey Avenue to South Upland avenue, with another parcel east of Abbey. All of the former Wright properties are east of Abbey.
Redevelopment must focus on what Sculimbrene called “returning Dayton’s most historical corridor, West Third Street, back to what it was.”
“We have some jewels along West Third Street,” Sculimbrene said.
The site will be more than a homage to history. There is already some manufacturing interest in the area, White said.
Composite materials manufacturer Liteflex has been identified as an end user on about five to seven acres of the former Delphi facility, White said.
“We have all the right people who are interested in helping us,” White said.