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05-07-2007, 10:17 AM
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#1
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,035
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401k Expense ratio's
well I just received my quarterly statement from MegaCorp's 401k plan. I guess do to the Pension Protection Act passed last year they now have to disclose the expense ratios of all of the 401k funds available to be chosen for investment in the plan.
All I can say is WOW what a revelation. There were a number of funds with average expense ratios of 50-100 basis points (ie. 0.5-1.0 %) as expected. But the real eye-opener was that some of the funds, evidently run for institutions, had expense ratios of only 5 basis points (0.05%). Now that's the kind of fund I like !
Why didn't they disclose this a couple of decades ago, I would have switched plan choices.
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05-07-2007, 10:55 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 1,543
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Re: 401k Expense ratio's
read the small print. i did some research for someone at work for a 401k for their SO, and all their funds had sales charges up to 5%
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05-07-2007, 12:03 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Feb 2005
Posts: 2,030
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Re: 401k Expense ratio's
 Quote:
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Originally Posted by al_bundy
read the small print. i did some research for someone at work for a 401k for their SO, and all their funds had sales charges up to 5%
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Not at a Mega corp.
5 BPS is common for index funds in large plans
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05-07-2007, 01:39 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 1,543
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Re: 401k Expense ratio's
this person works for a fortune 500 company
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05-07-2007, 02:06 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Feb 2005
Posts: 2,030
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Re: 401k Expense ratio's
Quote:
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Originally Posted by al_bundy
this person works for a fortune 500 company
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I've worked with qualified plans for a while and I find that nearly impossible to believe. No company would risk the liability for that.
Many plans of that size do offer load funds on a load waived basis, but as far as charging a load it violates the rules with every fund company I know to charge a load on any fund balance over $1M
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05-07-2007, 02:15 PM
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#6
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2006
Posts: 12,332
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Re: 401k Expense ratio's
Quote:
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Originally Posted by saluki9
I've worked with qualified plans for a while and I find that nearly impossible to believe. No company would risk the liability for that.
Many plans of that size do offer load funds on a load waived basis, but as far as charging a load it violates the rules with every fund company I know to charge a load on any fund balance over $1M
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Could be one of those VA products from Hancock or ING......they still have M&E on them.................. 
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05-07-2007, 02:53 PM
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#7
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jun 2005
Posts: 5,550
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Re: 401k Expense ratio's
My spouses's 401(k) has no offering with less a 2% annual fee. There is always a 0.95% mortality and administration fee and the underlying fund expense ratio. The front-end loads are waived in her current plan. At her previous employer they were B class shares were used. If you haven't guess, my spouse works for a small business with less than 30 employees.
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05-07-2007, 04:11 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 1,543
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Re: 401k Expense ratio's
this person works for a major healthcare company down south. person at work asked me to look and give my opinion so i went through the whole thing, most funds were from blackrock and a few other companies and there were high loads and sales charges on every single one.
that's what i said in my notes along with the fact that this person chose funds with a high correlation of finance/bank stocks and exposure to mortgages and the finance industry in general
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