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Wal-Mart (WMT) has been talking to both Wells Fargo (WFC) about Bank of America  (BAC)...

Wal-Mart (WMT) has been talking to both Wells Fargo (WFC) about Bank of America  (BAC) about managing its $15.6B 401k program, run for the last 15 years by BofA, Reuters reports. BrightScope estimates Wal-Mart has 1.2M+ people participating in its retirement plan, and that the average account balance stands at $15K. Reuters notes Wal-Mart is seen as a marquee client in the retirement plan space in spite of a small average account size, and that plan administration deals "rarely come up for grabs."
Comments (8)
  • Unfortunately 401K's tend to have limited selections and it will probably fall on the shoulders of the individual participants to carry the burden of the costs with high fees on any of the funds offered by the plan - - (Or could it be that WMT is actually asking WFC to offer lower fee funds for the employees? - - That could benefit the employees in the end - - The article is really not that clear on the issue)

     

    Hopefully, if they are smart, the employees (most of whom are not making that much per hour to begin with) will put the majority of their money into a Roth or IRA, perhaps with a bank or broker and then the balance into the 401K
    20 Jun 2013, 06:53 PM Reply Like
  • BAC in trouble again? Really? Hardly a day goes by. If I ever get a chance to sell this terrible company for half what I paid, I'll be long gone.
    20 Jun 2013, 07:52 PM Reply Like
  • Witty - It is not uncommon for some of the cost of administering a retirement plan to be embedded in the fund transactions within the plan's investment options. So lower plan administration fees results in higher returns for the employee as well as lower plan costs for the employer. And this isn't a WMT thing.

     

    A couple of other points you might want consider...
    WFC has been seeking out other large scale plans to manage because they want to expand their business in that market. In order to get it, I'm sure they are quoting with a very sharp pencil.

     

    Next, it is generally accepted as a good practice to periodically review the plan costs by putting the plan administration out for bid you can.and make sure you are paying the best admin cost

     

    Reuters published the article this report re-posted. Pretty basic and informative and not too long. Might be good thing to read the foundation before declaring, "Piss on WMT" to the whole internet.
    20 Jun 2013, 08:01 PM Reply Like
  • I don't have a problem with WMT looking at the fees they pay to make sure it's competitive. My problem with WMT is they are always looking to get lower prices. Sure they may pass it on to the consumer who shops in their store, but on the flip side, wages are low across the board: They barely pay their staff above minimum wage and they don't pay but 75-80% of scale on the construction of their new stores. Yet, at the same time profits are high and bonuses to the corporate office is at the expense of everyone else. It's isn't right nor fair when every other business with these same types of accounts are paying the going rate.
    21 Jun 2013, 08:31 AM Reply Like
  • Wife has been an hourly employee for WMT for 18 years and loves it. She works on the sales floor - not a store or asst or zone manager. And is paid very nicely. And I can tell you it is far above minimum although that is where she started. As for WMT being the only retailer paying wages at this level or cutting hours - here where we live starting wage at every major retailer is within 20c for equal positions. They are all reducing hours and they are all hiring very few "full time" workers (other than management).
    As for construction wages - WMT doesn't hire the construction workers. They contract with a contractor who hires and pays the construction labor. WMT contracts for a specific cost - how the contractor makes it's profit is up to the contractor.
    I agree that throughout our economy, there are serious issues with the vulgar and immoral executive compensation packages that are in place with little or no performance accountability - including the performance of those you manage. But WMT is only one of thousands engaged in this practice.
    My small manufacturing company has the same types of accounts as several others in this area. And I absolutely refuse to pay the "going rate". I negotiate for the lowest cost I can for every contract. My company exists for a single purpose - make as much profit for us as we can legally and morally. I care for and provide for my employees and I value them but they know we expect maximum effort and commitment each and every day from each and every employee. If you don't bring and add that to the game our relationship will be very short lived. And frankly, my wife's biggest frustration at WMT is co-workers that don't do their job or only do it half-assed or it takes two of them to do a job that she does by herself in half the time and with better quality.
    21 Jun 2013, 10:01 AM Reply Like
  • WMT is a good business contact. Its a foot in the door to reach out not only to their employees but all their customers. Banking service can be offered in kiosks in every store. If they can get a McDonalds berger there they could be able to get a debit/credit card with full banking services. This could also be extended to their stores in Mexico. With immigration reform, Mexicans can be exposed to other services to make their trips to the US easier including foreign exchange transactions, communications, money wire services and transactions in either pesos or dollars with the commenserate fees applied to make it another profit center for the bank.
    20 Jun 2013, 08:16 PM Reply Like
  • Watch the PBS Frontline special on 401Ks. It is a total rip off that only the administrators win.
    20 Jun 2013, 10:55 PM Reply Like
  • This is inaccurate as Bank of America/Merrill Lynch are already the managers of the Wal-Mart 401K.
    21 Jun 2013, 08:43 AM Reply Like
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