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Establishing a 401k
Old 07-29-2015, 11:34 AM   #1
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Establishing a 401k


My employer wants to establish a 401k (small business with about 30 employees and nobody earns over 100k) and I'm wondering who everyone has for their 401k so I can find some good companies to go with.

I like Vanguard but I'm not sure if they have a traditional 401k (I heard their small business fee is 3500/yr+20/fund unless someone is on flagship). I also found Employee Fiduciary and Online 401k.

I'm between traditional 401k and safe harbor 401k for their high contribution limits.

Does anyone have any wisdom on which companies to go with or any pointers on 401k? Or any links/keywords to find to any posts where another small business may have had the same situation?

I appreciate any help!

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Old 07-29-2015, 12:31 PM   #2
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I'm certainly not an expert on this by any means, but I would certainly call Vanguard and a few others and try to get an apples to apples comparison quote.

I read an article in our paper recently about a start-up that is specializing in this - the article is behind a paywall but here is a link to the company:

I also noticed that Sharebuilder (now part of Capital One) offers small business 401Ks - they are known for low cost investing options:

Good luck!

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Old 07-29-2015, 12:45 PM   #3
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Generally, small company plans really stick the costs on the participants with high-fee funds with front-end loads, etc. The big boys like Vanguard and Fidelity usually do not accept small plans.

That said, there is good info here on how to get an inexpensive small-company 401(k):

There is a lot to read there if one goes through the links, too.
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Old 07-29-2015, 03:54 PM   #4
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I would check into Charles Schwab as the "custodian".
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Old 07-29-2015, 07:14 PM   #5
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Two good options to consider for smaller plans are Employee Fiduciary and (surprised me) MassMutual.
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Old 08-27-2015, 04:03 PM   #6
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Thanks again for all the help. I'm setting up a SafeHarbor401k with Employee Fiduciary. I'm now deciding on which Investments to choose, I'm allowed up to 40.

I'd appreciate some guidance as to refine this. The list is pretty good on low expenses though I am seeing if we can use institutional or institutional plus funds which would have even lower expense ratios.

All but 1 are with Vanguard and it's because Vanguard has nothing focused on renewables and ICLN had the lowest ER with consistently profitable companies.

Ticker Name ER
1 VTSMX Total Stock 0.05
2 VTIAX Vanguard Total International Stock Index Fund Admiral Shares 0.14
3 VFIAX S&P 500 0.05
4 VTMGX Developed Markets 0.09
5 VEMAX Emerging Markets 0.15
6 VTRIX Vanguard International Value Fund 0.44
7 VVIAX Vanguard (Large cap) Value Index Fund Admiral Shares 0.09
8 VIMAX Vanguard Mid-Cap Index Fund Admiral Shares 0.09
9 VMVAX Mid Cap Value 0.09
10 VSMAX Vanguard Small-Cap Index Fund Admiral Shares 0.09
11 VSIAX Vanguard Small-Cap Value Index Fund Admiral 0.09
12 VSGAX Vanguard Small-Cap Growth Index Fund Admiral 0.09
13 VSS Vanguard FTSE All-World ex-US Small-Cap ETF 0.19
14 VGSLX REIT 0.12
15 ICLN Global Clean Energy Index 0.47
16 VCSAX Vanguard Consumer Staples Index Fund Admiral Shares 0.12
17 VMIAX Vanguard Materials Index Fund Admiral Shares 0.12
18 VGPMX Vanguard Precious Metals and Mining Fund 0.29
19 VMMXX Prime Money Market 0.16
20 VAIPX Inflation Protected Securities 0.1
21 VBTLX Total Bond 0.07
22 VTABX Vanguard Total International Bond Index Fund Admiral Shares 0.19
23 VWEAX Vanguard High-Yield Corporate Fund Admiral Shares 0.13
24 BLV Vanguard Long-Term Bond ETF 0.1
25 VBILX Vanguard Intermediate-Term Bond Index Fund Admiral Shares 0.1
26 VBIRX Vanguard Short-Term Bond Index Fund Admiral Shares 0.1
27 VFSUX Vanguard Short-Term (Bonds) Investment-Grade Fund Admiral Shares 0.1
28 VSBSX Short-Term Government Bonds 0.12
29 VFIRX Short-Term Treasury Funds 0.1
30 VWENX Vanguard Wellington Fund Admiral Shares 0.18
31 VBIAX Vanguard Balanced Index Fund Admiral Shares 0.09
32 VTWNX Vanguard Target Retirement 2020 Fund 0.16
33 VTTVX Vanguard Target Retirement 2025 Fund 0.17
34 VTHRX Vanguard Target Retirement 2030 Fund 0.17
35 VTTHX Vanguard Target Retirement 2035 Fund 0.18
36 VFORX Vanguard Target Retirement 2040 Fund 0.18
37 VTIVX Vanguard Target Retirement 2045 Fund 0.18
38 VFIFX Vanguard Target Retirement 2050 Fund 0.18
39 VFFVX Vanguard Target Retirement 2055 Fund 0.18
40 VTTSX Vanguard Target Retirement 2060 Fund 0.18
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Old 08-27-2015, 04:25 PM   #7
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Yikes. 40 is an awful lot. Are you familiar with the "paradox of choice" literature? Unless you have an exceptionally adept group of employees, this may be too much of a good thing. Far more than required to meet fiduciary standards; I'd try to winnow it down quite a bit.

For those with knowledge, how many choices are in the USGov plans?

Will there be auto-enrollment? What is the default investment choice--target funds?
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Old 08-27-2015, 04:44 PM   #8
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I set up small 401(k) with Employee Fiduciary in 2008. I have been very happy with them. The web site is easy to navigate, and well done. The staff is immediately available by phone and email, and my main contact person has been there since I set up my plan (low employee turnover, which has been very nice).

I placed far fewer than 40 funds in my plan. I have age appropriate target date funds for my employees, plus about 8 other well chosen funds. All are with Vanguard. I think it dramatically reduces churning and complicity.

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